IAMAI Slams RBI for Banning Crypto in India, Says Central Bank has no Such Authority

IAMAI or Internet and Mobile Association of India has slammed the move by the Reserve Bank of India (RBI) of releasing the circular directing banks to stop serving crypto companies, which literally killed many of them in the country. While arguing in the Supreme Court, the IAMAI counsel Ashim Sood stated that the RBI has no authority to ban crypto.

He further added,

RBI cannot step out of its powers as set out in the Banking Regulation Act. Therefore, its action against private businesses in the form of a circular is illegal.

RBI had released the circular in April 2018, and since the following July, banks and financial institutions stopped serving crypto companies. This move caused many companies to completely shut their operations in the country due to the lack of banking facilities. Despite the outrage from the crypto community in the country, the apex monetary regulator refused to take back the tokens.

While globally, authorities are moving towards regulating the crypto industry and hence accepting digital currencies. However, India has been quite hostile, and hence, despite being a potent market for the industry. The counsel also argued that the RBI hadn’t conducted any comprehensive research before banning crypto. He added that the ban was only done on moral grounds.

Last month, a bill was introduced in the parliament which criminalized crypto trade in the country completely, putting an end to the crypto dreams in the country. At the time when the world is debating on whether crypto can takeover the prevailing monetary systems, India’s decision to ban crypto can be termed ‘worrying’ to say the least.

In its submissions to the court, IAMAI stated that the RBI’s decision to ban crypto was arbitrary, unfair, and unconventional. The matter is now set for hearing on Tuesday, 20th August.