There is no restriction on banks providing services to crypto clients – Reserve Bank of India

• Earlier, a right to information (RTI) was filed, seeking clarity on whether banks are prohibited from serving crypto traders and services. 
• The Reserve Bank of India has clarified that banks are allowed to offer financial services to their crypto customers.

The Reserve Bank of India (RBI), India’s central bank, has recently clarified its stance on financial services for crypto-related businesses. In response to a right to information (RTI) request, the bank has clarified that banks are free to provide financial services to crypto traders or companies. The request was filed by Harish BV, the co-founder of the Unocoin crypto exchange. 

Back in 2018, the RBI had imposed a ban, restricting banks and other regulated entities from dealing with businesses or traders transacting in crypto. Following this, several firms and traders received warning statements from their banks, asking them to either stop their crypto activities or to suspend their bank accounts. 

Later in March, the Supreme Court of India lifted RBI’s ban. However, there was still no clarity on whether banks could support the accounts of their crypto customers. Some banks continued to refuse services to crypto businesses even after the ban was lifted. Mohammed Danish, a local fintech lawyer, had said that the Supreme Court’s ruling did not include an order for the RBI to inform banks to comply with the court order. Harsh BV then filed the information request, asking if banks are prohibited from providing services to crypto businesses. In response, the RBI wrote, “as on date, no such prohibition exists.” 

According to a Cointelegraph report, Harish BV said: 

After Supreme Court scrapping RBI’s Ban on crypto and RTI’s reply from RBI, it is clear that there is no need for any blockchain or crypto company to register out of India.