HDFC Bank withdraws its communication on cryptocurrency caution post RBI clarification
The bank had sent emails dated May 28, 2021 to some of the customers with the subject 'Caution Advice for dealing in virtual currency' probably due to the high-risk involved in such transactions.
June 04, 2021 / 08:35 AM IST
On number 5 of India’s most valuable brand is HDFC bank
The country's largest private sector lender, HDFC Bank has withdrawn its earlier communication sent to some of its customers cautioning against using the bank's services in trading in cryptocurrencies in the wake of the regulator's clarification on the matter.
The bank has now sent fresh emails to customers asking them to ignore the earlier email in view of the clarification from the Reserve Bank of India (RBI) on May 31 that the RBI's 2018 circular on virtual currencies is invalid post a Supreme Court order.
The bank had sent emails dated May 28, 2021, to some of the customers with the subject 'Caution Advice for dealing in virtual currency' probably due to the high risk involved in such transactions. However, the RBI on May 31 issued a clarification saying banks and other regulated entities cannot cite its 2018 circular on cryptocurrencies as it has been set aside by the Supreme Court (SC) in March 2020. The circular is not valid from the date of the SC order and cannot be cited or quoted from, the RBI said.
Also Read: Cryptocurrency: HDFC, SBI, other banks warn users of account suspension if trading continues
The central bank, however, asked banks to carry out the necessary customer due diligence process in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT), and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002.