Some Indian Banks Continue to Ignore Supreme Court’s Crypto Verdict

Some Indian banks are ignoring the Supreme Court’s verdict declaring RBI’s banking ban for cryptocurrency unconstitutional. The banks continue to decline crypto transactions arbitrarily.

Why do banks deny transactions?

Some banks like IndusInd Bank and HDFC Bank are arbitrarily declining cryptocurrency transactions to their customers. The banks suggest that they are waiting for the central bank, Reserve Bank of India (RBI) on this matter. The RBI had banned all transactions with cryptocurrency entities in April 2018 which led to the downfall of several crypto companies in the country.

After a long fight, the Supreme Court finally gave the verdict in favor of the Indian crypto entities and suggested that the RBI’s move was unconstitutional. Now, banks are free to open accounts for crypto companies and process crypto transactions. The RBI has not given any explicit information related to the same to the banks. On the other hand, it is planning to challenge the verdict of the court.

Banks are at a standstill

Highlighting the issue of refusal of service, Mohammed Danish from Fintech Lawyers sent a letter to two RBI officers and Finance Secretary Ajay Bhushan Pandey. He wrote, “Few instances have come light which clearly suggest that bank(s), including HDFC and IndusInd Bank, are still arbitrarily declining to process the transactions for sale/purchase of crypto assets.

Danish said that banks haven’t provided written information to their customers about not allowing crypto transactions. Instead, they are passing the message verbally and waiting for an RBI notification in the meanwhile. Note that one of the banks not allowing these transactions is HDFC, the largest bank in the country by market capitalization. It is also the largest private sector bank by assets.

The lawyer noted that the circular doesn’t exist now because of the Supreme Court verdict and the banks must comply with the court’s order now. He added that the court did not ask the RBI to release a separate notification for banks to allow the sale and purchase of cryptocurrencies. This means that the banks must immediately allow crypto transactions to their customers instead of waiting for the regulator’s statement.

In this environment, the failure of the banks in providing crypto transactions to its customers should be considered illegal and willful disobedience of the Supreme Court. Danish is seeking official communication from the RBI personnel in this regard. The RBI’s response is yet to be received.