How do Indian banks view and handle cryptocurrency transactions?

The Indian government has not yet established a clear regulatory framework for cryptocurrency trading. However, there have been some regulatory developments that have impacted the cryptocurrency industry in India.

The Reserve Bank of India (RBI) has previously prohibited banks from dealing with cryptocurrency businesses, which made it difficult for cryptocurrency exchanges to operate in the country. However, in March 2020, the Supreme Court of India lifted this ban, stating that the RBI circular was unconstitutional.

The Indian government has also proposed a bill that would ban all private cryptocurrencies and create a framework for an official digital currency issued by the RBI. This bill has not yet been passed into law, and there is some opposition to it within the government.

In the absence of clear regulations, some cryptocurrency exchanges in India have implemented their own Know Your Customer (KYC) and AntiMoney Laundering (AML) policies to ensure that they comply with international standards. Additionally, some exchanges have formed a selfregulatory body called the Blockchain and Crypto Assets Council, which aims to establish industry standards and guidelines for cryptocurrency trading in India.

Overall, the regulatory environment for cryptocurrency trading in India remains uncertain, and investors should closely monitor regulatory developments and consult with legal and financial experts before engaging in cryptocurrency trading.