The Reserve Bank of India (RBI) has published an official note clarifying local banks’ stance on cryptocurrencies amid the latest press reports. Such information reportedly warned that domestic financial institutions cautioned customers against using digital assets, and the RBI pointed out that they’re aware of it.

According to the official notice, the Indian central bank had clarified that regulated financial institutions and banks can still perform customer checks on Anti-Money Laundering (AML), Know Your Customer (KYC), and Combating of Financing of Terrorism (CFT) procedures regarding crypto transactions.

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“It has come to our attention through media reports that certain banks/ regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to the RBI circular DBR.No.BP.BC.104/08.13.102/2017-18 dated April 06, 2018. Such references to the above circular by banks/ regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 04, 2020 in the matter of Writ Petition (Civil) No.528 of 2018 (Internet and Mobile Association of India v. Reserve Bank of India),” the RBI said, adding that such circular cannot be cited or quoted from anymore.

Indian Banks Reportedly Quoting Older Circulars

The notice comes in the wake of reports coming from local media outlets, such as Business Insider India, which claimed that domestic largest banks such as the State Bank of India and HDFC issued warnings targeted users against dealing with cryptocurrencies.

In fact, such financial institutions reportedly quoted older circulars coming from the banning ordered by India in 2018, which was removed in 2020.

“We have observed that your account reflects probable virtual currency transactions, which aren’t permitted as per RBI guidelines,” an email from HDFC addressed to a customer noted. “To comply with the regulatory guidelines (RBI vide guidelines DBR.No.BP.BC.104 /08.13.102/2017-18 dated April 06, 2018), the banks are advised to exercise due diligence by closely examining the transactions carried out in the account on an ongoing basis,” it added.