Indian Bank Blocks Use of RBI's Remittance System for Crypto While Government Delays Bill

Major Indian bank ICICI has asked customers not to use the Reserve Bank of India (RBI)’s liberalised remittance scheme (LRS) for any crypto-related investments.

  • ICICI, a leading private sector bank in India, has updated its retail outward remittance application to include cryptocurrency.
  • With this update, the bank has asked its customers to declare under India’s Foreign Exchange Management Act 1999 (FEMA) that they will not use the Reserve Bank of India (RBI)’s liberalised remittance scheme (LRS) for any crypto-related investments.
  • The bank’s declaration states:

The above remittance is not for investment / purchase of bitcoin / cryptocurrencies / virtual currencies (such as ethereum, ripple, litecoin, dash, peercoin, dogecoin, primecoin, chinacoin, ven, bitcoin or any other virtual currency / cryptocurrency / bitcoin).

  • Customers must also declare that the remittance is not for any investments in a “company dealing in bitcoins / cryptocurrency / virtual currencies.”
  • Furthermore, customers must also declare that “The source of funds for the proposed remittance is not proceeds from redemption of investment in cryptocurrency / bitcoins / virtual currencies and also end use of.”
  • ICICI bank was among several major Indian banks that halted services to crypto customers after the RBI issued a notice regarding its April 2018 circular that banned banks from providing services to crypto businesses.
  • In May, the central bank issued a notice to banks stating that “the circular is no longer valid from the date of the supreme court judgment, and therefore cannot be cited or quoted from.” The Indian supreme court quashed the circular in March last year.
  • Meanwhile, the Indian crypto bill is not listed in the upcoming session of parliament, the Monsoon Session, despite the country’s finance minister stating recently that the bill was ready for cabinet consideration.

What do you think about ICICI bank’s crypto policy and the crypto bill being delayed? Let us know in the comments section below.

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