RBI has requested banks to conduct due diligence of consumers coping with crypto currencies
The Reserve Bank of India (RBI) has advisable that banks and different monetary establishments ought to proceed to conduct due diligence of consumers who’re coping with digital currencies, that are additionally known as crypto currencies.
In a clarification issued by the RBI, it stated that some media reviews have talked about that sure banks have cautioned their clients whereas coping with digital currencies, citing an order issued earlier by it.
In an announcement, the RBI has stated that the actual order is not legitimate because it had been put aside by the Supreme Court.
“It has come to our attention through media reports that certain banks and regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to the RBI circular dated April 6, 2018,” the RBI stated in a round on Monday.
“Such references to the above circular by banks and regulated entities are not in order as this circular was set aside by the Supreme Court on March 4, 2020,” it stated.
“As such, in view of the order of the Supreme Court, the circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from,” the RBI round added.
However on the identical time, the RBI has requested banks in addition to different entities to proceed finishing up buyer due diligence processes consistent with rules governing requirements for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities beneath Prevention of Money Laundering Act, (PMLA), 2002.
In addition to this, the central financial institution has additionally suggested monetary establishments to make sure compliance with related provisions beneath Foreign Exchange Management Act (FEMA) for oversea remittances whereas endeavor due diligence of consumers.
