RBI circular barring banking service for crypto-currencies challenged in HC
PrintListen to this Article
A bench of justices S Ravindra Bhat and A K Chawla issued notice to the Ministry of Finance, the Reserve Bank of India (RBI), which issued the circular, and the GST Council and sought their reply by May 24.
The order came on the plea by Gujarat-based company, Kali Digital Ecosystems Pvt Ltd, which was proposing to undertake the business of operating a crypto-currency exchange system for customers within India.
The company has claimed that it has already undertaken substantial investment in this regard and planned to roll-out the exchange system, called 'Coin Recoil', in August this year.
However, due to the April 6 circular issued by the RBI, the company claimed it would not be able to avail banking services, imperative for its business, to operate it, the petition has said.
Under the circular, entities regulated by the RBI have been prohibited from "providing any service in relation to virtual currencies, including those of transfer or receipt of money in accounts relating to purchase or sale of virtual currencies", it has said.
For entities which are already providing such services, three months time has been given to them to cease such activity, the plea has said.
Apart from seeking quashing of the circular on the ground that it is "arbitrary, unconstitutional and violative of the Constitution", the petition has also sought a direction to the Goods and Services Tax (GST) Council to "frame appropriate regulation on crypto-currencies".
Crypto-currencies are digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
The company has claimed that lack of regulations on crypto-currencies has "increased the uncertainty over treatment of such transactions and is adversely affecting the proposed business of the petitioner". #casansaar (Source - PTI)
Category : RBI | Comments : 0 | Hits : 663
RBI has issued draft rules to tighten dividend payouts by banks by linking distributions to capital adequacy, asset and profit quality, setting a uniform prudential framework effective from FY27. In the previous financial year, banks paid over Rs 75,000 crore dividend after booking record profits. Under RBI's draft rules, dividend payments by banks will be governed by a common set of conditions from FY27. The directions apply to all banking companies, corresponding new banks and SBI, and ...
Listing of an Indian company on international stock exchanges got a push with the Reserve Bank of India (RBI) coming out with regulations under Foreign Exchange Management (FEMA). Experts believe new regulations will help companies utilise foreign exchange more effectively. Regulations have been made public through two notifications. First set of regulations deals with mode of payment and reporting of non-debt instruments. “The proceeds of purchase / subscription of equity shares of an ...
The Lok Sabha elections 2024 are in full swing with electioneering adding much colour to the entire process. However, to ensure that there is no wrongdoing, the Reserve Bank of India (RBI) has sent a missive to Payment System Operators (PSOs) asking them to keep a watch on all suspicious high-value transactions that they may come across in their systems. The general purpose of the letter is to deny the use of electronic fund transfer mechanism to anyone who is intending to influence the election...
he Reserve Bank on Tuesday came out with draft guidelines to further strengthen regulations on payment aggregators, a move aimed at boosting the payment ecosystem. The draft also covers the physical point-of-sale activities of payment aggregators (PAs). The RBI said that given the growth in digital transactions and the significant role that PAs play in this space, the current directions on PAs are proposed to be updated and cover, inter alia, KYC and due diligence of merchants, operations ...
The RBI on Monday eased rules to allow resident entities to hedge their exposures to the price risk of gold using the OTC derivatives in the International Financial Services Centre (IFSC) in addition to the derivatives on the exchanges in the IFSC. Resident entities such as banks were permitted to hedge their exposure to the price risk of gold on the exchanges in the IFSC that are recognised by the International Financial Services Centres Authority (IFSCA), and the new directive provides them...
Comments