An Indian FinTech lawyer, Mohammed Danish, filed a representation on 12 March 2020 to the Reserve Bank of India— the country’s central bank— against the arbitrary dealing of certain domestic banks which were refusing services that were in support of the purchase and sale of crypto assets.
Mohammad Danish, along with Kashif Raza, is the co-founder of an Indian crypto news platform called Crypto Kanoon which also provides legal advisory services related to blockchain and cryptocurrency.
Why is this Worrying?
After India’s skeptical stance on cryptocurrencies, hope was seen with this month’s verdict of the country’s Supreme Court. In a move that promised to bring an end to the harsh outlook towards digital currencies, the highest legal authority of India had ruled to overturn a circular (which interestingly enough was also refuted by RBI itself recently) issued by RBI in 2018 which banned banks from providing services to crypto-related firms.
However, if the alleged conduct of the domestic banks is proven true, the future of cryptocurrencies in the country is still in jeopardy.
Conduct of Local Banks Arbitrary
Initially, in a big blow to the Indian crypto market, the Reserve Bank of India had banned banks from carrying out any crypto-related transactions.
However, the ban was completely overruled by the Supreme Court of India this year. Despite this, several banks like HDFC and IndusInd Bank continue to refuse crypto-related transactions. More arbitrary is the fact that the banks have not provided a written statement about their actions but are merely declining support to crypto firms by a verbal refusal.
Mohammad Danish adds that the conduct of the banks is not only unjust but also ‘absolutely illegal’. He further says that it is ‘wilful disobedience to the order of the Hon’ble Supreme Court’. His letter requests RBI to issue an official direction to all the banks regarding the same.