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HDFC BANK WITHDRAWS CRYPTO-CURRENCY ADVICE FOLLOWING THE CIRCULAR RBI

HDFC BANK WITHDRAWS CRYPTO-CURRENCY ADVICE FOLLOWING THE CIRCULAR RBI
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HDFC Bank has requested its clients to ignore its prior cryptocurrency alerts. Previously the alert had quoted a circular dated 2018 from the Reserve Bank of India. The bank started its previous caution had to be ignored in its current communication to consumers. It again quoted earlier this week’s RBI Circular saying that banks cannot quote the Order of 2018.

“We wish to update you that in light of the advisory issued by RBI vide their Circular DOR. AML.REC 18/14.01.001/2021-22 dated May 31, 2021, on ‘Customer Due Diligence for transactions in Virtual Currencies’, we request you to ignore our earlier communication dated May 28, 2021. Inconvenience caused is regretted,” HDFC said in its new mail.

The circular on 28 May said that regulated firms, as determined by RBI, cannot handle virtual currencies, or provide any person or organization with services aiding the handling of virtual currencies. The bank asked its clients to visit the next branch within 30 days of the communication with their services for crypto-monetary transactions to clarify the nature of these transactions. “In case we do not hear from you, the bank will be compelled to restrict transactions in your account without any further notice,” the mail said.

The RBI, on May 31, said that its 2018 circular was no longer valid and barred banks from citing it. “Such references to the above circular by banks or regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 04, 2020,” it said.

The central bank, on the other hand, has asked banks to carry out the necessary customer due diligence process in accordance with regulations governing Know Your Customer (KYC), Anti-Money Laundering (AML), Combating Terrorist Financing (CFT), and regulated entity obligations under the Prevention of Money Laundering Act (PMLA), 2002. The Foreign Exchange Management Act (FEMA) requires banks to guarantee compliance with the terms of this Act for transfers overseas, says RBI.

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Written by Hardik Tokas

Hardik Tokas is a law graduate from GGSIPU, Delhi. He is an analytical thinker, an active team player who is proactive in legal research and writing, and has highly motivated enthusiasm for business, start-ups, and entrepreneurship. He has the vision to deliver excellent support to the visionary entrepreneurs and educate them in all legal compliances of applicable laws considering their business level and long term growth. He is a goal-oriented professional and a valuable member of the organization.

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