HDFC Bank Sets Aside Previous Warning Against Crypto Transactions

After RBI’s Clarification, HDFC Bank Asks Users To Ignore Previous Warning Against Crypto Transactions

SUMMARY

The users no longer need to visit their nearest bank branches to clarify their crypto-related transactions

The Bank on May 28 had asked its users to visit their nearest branches within 30 days, else their account will be restricted without further notice

The latest email has been sent after the RBI asked the banks not to invoke the April 2018 notification

The country’s largest private sector bank HDFC has taken cognizance of RBI’s notification asking banks not to take action against account holders for crypto transactions. The bank has sent a fresh email to its consumers requesting them to ignore the previous emails that had threatened users of restricting their bank accounts for making crypto transactions.

Welcoming the move by the regulator, various exchanges told Inc42 that they were hopeful of other banks falling in line too.

On May 28, the HDFC Bank had sent emails to a selected list of consumers that may have been involved in crypto transactions. Amid lockdown, the bank had asked these consumers to visit their nearest bank branches within the next 30 from getting restricted without further communication.

While banks like ICICI and Paytm Payments Bank did not issue any official clarification over blocking crypto transactions, the State Bank of India too had sent emails similar to HDFC Bank threatening its credit card users that it would block their credit cards in case of any crypto transactions.

While most of the banks such as ICICI Bank, Paytm Payments Bank and the State Bank of India did not directly cite the RBI’s April 6, notification, the HDFC Bank in a slew of emails to its users cited the RBI April 6, 2018 notification to justify their anti-crypto stance.

In order to avoid contempt of court, the RBI thus was compelled to issue the clarification. In its latest notification, the central bank said, “It has come to our attention through media reports that certain banks/ regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to the RBI circular DBR.No.BP.BC.104/08.13.102/2017-18 dated April 06, 2018. Such references to the above circular by banks/ regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 04, 2020, in the matter of Writ Petition (Civil) No.528 of 2018 (Internet and Mobile Association of India v. Reserve Bank of India). As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgment, and therefore cannot be cited or quoted from.”