Leading Indian banks are reportedly warning their customers officially against dealing in crypto and virtual currencies. Customers have complained about receiving mailers from respective banks advising against cryptocurrency transactions, citing a 2018 circular from the Reserve Bank of India, which was already struck down last year by the Supreme Court.

Indian Banks Warns Customers Against Crypto Dealings

India’s stance on cryptocurrency regulation still stands unclear. Despite the Supreme Court smashing an RBI directive last year that prevented banks from dealing with crypto transactions, the Reserve Bank has informally asked financial institutions not to deal with cryptocurrency platforms once again.

For instance, leading Indian banks such as HDFC and SBI have recently sent out mailers warning of restrictions if customers are found to use their credit/debit cards for buying cryptocurrencies.

In the email, the bank cited RBI’s 2018 circular that prevented financial institutions from providing services to any individual or business dealing in cryptocurrencies.

“Please note, usage of credit card for transactions on virtual currency merchant platforms may lead to suspension/cancellation of your SBI Credit Card in terms of the Cardholder Agreement” read the SBI mailer.

Earlier this month, a number of leading Indian private banks such as ICICI Bank Ltd., HDFC Bank, IndusInd Bank Ltd., and Yes Bank Ltd distanced themselves from local crypto exchanges after the RBI made informal calls to bank teams seeking information about the extent of business that they do with crypto traders and exchanges.

Indian Govt Forms New Panel on Cryptocurrency Regulation

Cryptocurrencies might not face a complete ban in India as a report surfaced recently that the government is likely to set up a panel of experts to study the possibility of regulating it.

The news comes at a time when many feel that the recommendations of the committee headed by former finance secretary Subhash Garg in 2019 for a blanket ban had become outdated.

The new committee is likely to explore the use of blockchain for technological advancement, and suggest ways to regulate cryptocurrencies as digital assets. The committee might also find ways to operationalize the Reserve Bank of India’s (RBI) proposed digital rupee.