ICICI Bank dissuades customers from trading in cryptocurrencies

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In an attempt to dissuade its customers from trading in cryptocurrencies, ICICI Bank has modified its ‘Retail Outward Remittance Application form’ . The bank has also asked its customers who remit funds abroad for investments to sign a declaration stating that money won’t be used for cryptocurrency trade. In addition, ICICI Bank has also asked its customers to avoid RBI’s Liberalised Remittance Scheme (LRS) for investments in cryptocurrencies like Bitcoin.

Tweak in policy

ICICI Bank has tweaked its ‘Retail Outward Remittance Application form’, which falls under declarations that are a part of the Foreign Exchange Management Act. Under the new rules, customers will have to affirm that the proposed investments will not be utilised in buying cryptocurrencies. In addition, a customer has to declare that the foreign remittance won’t be invested in shares, mutual funds or other capital instruments of any company that deals in cryptocurrency. Customers, in order to avail the LRS, are now bound to agree to all these terms. LRS has so far been a major instrument in investments in cryptocurrencies and this move will have a huge impact on the transactions that take place in the Indian cryptocurrency market.

Introduced in 2004, Liberalised Remittance Scheme had a limit of $25,000 (Rs 18.6 lakh) under legal ambit of the Foreign Exchange Management Act, 1999. Under this scheme, remittances up to $250,000 (Rs 1.86 crore) could be allowed by authorised dealers for one financial year. The $250,000 limit includes remittances for current account transactions such as private visits, gifts, donations, business trips, studies overseas.

Other lenders

Mint had reported in May that top Indian banks like HDFC Bank and SBI had warned their customers against dealing in cryptocurrencies. It also reported that mails were sent out to certain clients inquiring about their transactions in cyrptocurrencies and they were advised against them. The banks had also sent out a stern warning saying that their cards might get cancelled or if they fail to adhere to the advisory.

The Reserve Bank of India earlier in May had informally asked top lenders to steer clear from businesses that deal in cryptocurrencies.