The Reserve Bank of India issued an announcement last Thursday prohibiting banks from “dealing with or providing services to any individuals or business entities dealing with or settling virtual currencies.”
RBI deputy governor Bibhu Prasad Kanungo says that the order, which is to take effect immediately,
is a proactive measure needed to ensure financial stability. He added that cryptocurrencies can seriously undermine India’s AML (anti-money laundering) and FATF (Financial Action Task Force) framework.
Tech and cryptocurrency personality Pankaj Jain tweeted that the move may just be a knee jerk reaction to an Indian cryptocurrency scammer who was arrested in Bangkok. However, the Indian government seems to be poised to bring down cryptocurrencies in the country as Indian finance minister Arun Jaitley already said last year that they do not consider cryptocurrencies as legal tender and will take all measures to eliminate it in financing illegitimate activities or as a mode of payment.