According to an RTI (Right To Information) filed against RBI has proved today that the central bank of India has unilaterally banned banking services to cryptocurrency exchanges in India in a bid to thwart the growth of this market.
Twitter user @Blockchainlaw91 shared a copy of the RTI filed today. It's almost shocking to see the responses to the queries and it's a must read to understand how some of our monetary policies are (poorly) conceived.
As per some of the points in the document it is clear that the RBI has done no real research that necessitates an outright ban. There was no internal committee formed with a panel of experts leading charge of the research needed to understand these cryptocurrencies and blockchain technology.
RBI has no insight on the entities under their regulation. This implies they have no complete data on how many banks or payment systems are regulated by them. They don't have any insight on entities regulated by them providing services to cryptocurrency oriented businesses.
They certainly don't seem to have any knowledge of blockchain or cryptocurrencies at all but they have the power to ban services to exchanges and levy penalties on banks if they don't adhere to the mandate set by RBI.
By the 6th of July all Indian cryptocurrency exchanges will stop deposits and withdrawals and only crypto-to-crypto trading will be allowed on all these platforms.
If you are an Indian citizen invested in blockchain technology and cryptocurrencies you should be angry at the incompetence of the people in-charge of our monetary policies. Please take your time to read the document!
Right to Information (RTI) is an Act of the Parliament of India to provide for setting out the practical regime of the right to information for citizens and replaces the erstwhile Freedom of information Act, 2002. Under the provisions of the Act, any citizen of India may request information from a "public authority" (a body of Government or "instrumentality of State") which is required to reply expeditiously or within thirty days. The Act also requires every public authority to computerise their records for wide dissemination and to proactively certain categories of information so that the citizens need minimum recourse to request for information formally. - Wikipedia
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