RBI asks banks to not deal in bitcoin entities

RBI recently asked banks, non-banking financial companies (NBFCs) and payment service providers to disassociate themselves from entities dealing with virtual currencies, including bitcoins, with immediate effect. The notification comes a day after the central bank in a ‘Statement on Developmental and Regulatory Policies’ warned of risks associated with virtual currencies.

The RBI has repeatedly cautioned users, holders and traders of virtual currencies, including bitcoins.

The services flagged by the RBI include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, among others.

Finance Minister Arun Jaitley had mentioned in his Budget Speech that crypto-currencies were not legal and affirmed to eliminate their usage.