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In a huge relief to cryptocurrency investors, the RBI issued a clarification saying banks or entities can't cite its 2018 order that barred them from dealing with virtual cryptocurrencies .The RBI said the order is no longer valid now. Such references to the above circular by banks or regulated entities are not in order as this circular was set aside by the Hon'ble Supreme Court on March 04, 2020 .
The issue was highlighted via social media when investors said several private and public sector banks, including HDFC Bank, State Bank of India and others, warned and denied digital currency exchanges' services citing the RBI's old circular.
The RBI statement said banks and other entities can, however, "continue to carry out customer due to diligence processes in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002, in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances".