Reserve Bank of India Bans Banks from Dealing with Cryptocurrency Purchases

With immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling Virtual Currencies

Marcus Zallman
Read +
Follow Us

According to new measures announced by the Reserve Bank of India (RBI), Indian residents will no longer be able to purchase cryptocurrencies using their bank accounts.

According to the Statement;

“Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies. In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time.”

The central bank has issued a three month grace period, that within that time, all banks should settle their businesses with entities or customers dealing with cryptocurrencies, however from today thou, traders will no longer be able to deposit or withdraw fiat currency and if they wish to continue to trade, they would need to seek alternative means.

In February, according to a transcript by The Hindu newspaper, India’s financial Minister told lawmakers that the government had planned to "take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.”