Reserve Bank of India’s circular restricting banks from serving crypto exchanges and traders was quashed by the Supreme Court of India on March 04, 2020. However, RBI has not revised its circular nor has it redacted it from the site. RBI refused to provide any information on the RTI request raised by Coin Crunch India including that of their policy on Virtual Currencies and on Central Bank Digital Currency (CBDC).
Banks still unwilling to support Crypto Exchanges despite SC Judgment
After the landmark judgment of March 04, by the Supreme Court of India quashing RBI’s “Banking Ban” aka circular RBI/2017-18/154 DBR.No.BP.BC.104 /08.13.102/2017-18, the expectation was the banks will welcome people with open doors. However, that has not been the case.
Several Crypto traders and exchanges have independently informed Coin Crunch about how certain banks are simply not entertaining their requests to open the bank accounts. The reason: RBI has not sent them a revised circular.
Is RBI mandated to nullify its old circular or issue a fresh one, the answer is NO. Why? Because there is no provision in any law which mandates RBI to issue fresh orders, says Advocate Mohammad Danish, who is also the legal adviser to CryptoKanoon, India based policy analysis platform.
Ashim Sood, the advocate who represented the exchanges in the Supreme Court, in an interview with CryptoKanoon said Banks cannot deny service. He added, “Certainly approaching a court of law and saying I have been arbitrarily denied a service (despite the judgment)” is an approach exchanges can take. Exchanges can file writ petitions under article 226 adds Danish.
Right to Information
As always, Coin Crunch chose a slightly different approach to ask RBI, what is going on. To our dismay, after almost a month, RBI responded with a simple – we don’t need to tell you what we are doing.
We asked three questions to the Reserve Bank using the RTI tool.
- (1A) – Why has RBI not removed the circular from the website.
- (1B) – Why has the Reserve bank not notified the regulated entities of the invalidation of the circular.
- Is the RBI working on any policy for dealing with virtual currencies?
- Has RBI setup a committee to decide on CBDC – Central Bank Digital Currencies or a virtual INR currency?
The answer to all the questions above is “What is sought is not ‘information’ as defined under Section 2(f) of the Right to Information (RTI) Act, 2005”
Hiding Behind a Clause
The Reserve Bank of India decided to hide behind a provision in the RTI act, Section 2(f) which defines what an “information” is. RBI says, the information we sought, is not defined in the act, and hence they need not answer.
You can see the full RTI response here.
Section 2(f) of RTI act of 2005 reads,
“information” means any material in any form, including records, documents, memos, e‑mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force;Section 2(f) of RTI Act, 2005
Did we deserve an answer? Does our questions fall under the Information definition? Let us know your thoughts in the comments below.