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SBI issues warnings for cryptocurrencies but does not ban purchases

Feb 21, 2018 Posted /  2448 Views

SBI issues warnings for cryptocurrencies but does not ban  purchases

State Bank of India (SBI), the second largest issuer of credit cards in India has circulated a warning on the risks associated with the utilization of cryptocurrencies. However, despite issuing a warning, SBI Cards & Payments Services Pvt. Ltd. does not appear to ban the purchase of bitcoin and other digital currencies through its credit cards as many bigger banks around the world have done.

Warning for risks associated with Cryptocurrency

SBI recently started issuing a warning to it customers, in which one of the largest banks in India outlined the risks associated with the virtual currencies. It seems that SBI Card is exploring to reemphasize on the precepts of Reserve Bank of India (RBI), country's premier bank. It is noteworthy that RBI had also issued an advisory to the citizens of India stating that they should not indulge in cryptocurrencies as the government had not given any licensing or authorisation to the cryptocurrencies. In fact, RBI clarified that it did not even license any authority to operate in cryptocurrency schemes.

This announcement is circulated after Citibank India banned the use of its credit and debit cards for buying virtual currencies such as Bitcoin and Ethereum. The press release by the bank stated “…Citi India has decided to not permit the use of its credit and debit cards towards purchase or trading of such bitcoins, crypto-currencies, and virtual currencies.”

The notice further states “Given concerns, both globally and locally, SBI Card would like to advise you to be mindful of potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with crypto-currencies and virtual currencies.”

SBI is one of the biggest banks in the country and at present has a customer base of over 5 million. The bank is the second biggest credit card issuer in India only after HDFC Bank Limited.

India to soon come up with Regulations?

Unlike its counterpart- Citi Bank, State Bank of India has not banned the purchase of Cryptocurrencies with its credit card. Despite numerous warnings by Indian officials, it seems that India's stance on cryptocurrencies will only be clear after regulatory guidelines for cryptocurrencies are released officially. There are some institutions and committees formed for the purpose and they would soon come up with some kind of legislation.  

Ajay Tyagi, Chairman of the Department of Economic Affairs, lately indicated that numerous perspectives of the regulatory mechanism have already been formulated, stating “We have actually decided which regulator will do what and the committee should come out with the regulations very quickly.”

Nonetheless, there seem to be some alarming calls, which are worrying the cryptocurrency community of India as they say, the predictions appear unwelcoming from the recent hullabaloo around the virtual currencies. The traders are on the other hand purchasing currencies from overseas in an attempt to circumvent the country's jurisdiction.

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Tags: SBI credit cards virtual currencies India

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