RBI Admits it did no Research Before Issuing Restrictions on Cryptocurrencies
India’s central bank, The Reserve Bank of India, got cracking on cryptocurrencies by announcing a ban on April 5th this year. They decided not to provide banking or financial services to anyone who engaged within cryptocurrencies.
The country’s central bank directed lenders to close down bank accounts of cryptocurrency exchanges and its users within three months.
With all these chaos going on, many did wonder about the integrity of the decision makers involved. Many questioned how much research the RBI had done while many easily presumed that a proper research was carried out.
In a response to a right to information (RTI) application filed by a local lawyer, Varun Sethi, the central bank has admitted that it has not done any research or consults finance experts prior to issuing such restrictions on Cryptocurrencies.
— Unocoin (@Unocoin) 13 June 2018
According to Quartz, Delhi based lawyer Varun Sethi stated:
“It seems as if the ban was arbitrary and it came into effect without any thought from the RBI. It has either answered in the negative or given conflicting answers to our questions asking what led to this ban.”
Ahead of the court hearing to mitigate the effect of the bank “prohibition” currently in force, lawyers representing the industry meanwhile appeared confident. The RBI does accept that its representatives have been part of two finance ministry-led committees formed to come up with regulations for digital currencies.
However, the government has still not banned cryptocurrencies. Therefore, the RBI’s decision may have been hasty, believe Indian virtual currency exchanges.
“This RBI response has cemented our case ahead of the hearing in [the Supreme Court],” Rashmi Deshpande, associate partner at Khaitan & Co said commenting on Sethi’s information.
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