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RBI warns users of virtual currencies

The RBI on Thursday said it has not given any licence or authorisation to any entity or company to operate such schemes or deal with Bitcoin or any virtual currency.

By: ENS Economic Bureau | Mumbai |
February 3, 2017 12:14:56 am
rbi, reserve bank of india, virtual money, virtual currencies, what is virtual currency, VC, indian express news, india news, business news The Reserve Bank of India (Source: File)

The Reserve Bank of India (RBI) has cautioned the users, holders and traders of virtual currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security-related risks involved.

The RBI on Thursday said it has not given any licence or authorisation to any entity or company to operate such schemes or deal with Bitcoin or any virtual currency. “As such, any user, holder, investor, trader, etc, dealing with virtual currencies will be doing so at their own risk,” the RBI said.

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The creation, trading or usage of VCs as a medium for payment are not authorised by any central bank or monetary authority. No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities, the RBI said.

Meanwhile, the RBI also said that non-banking financial company micro financial institutions (NBFC-MFIs) shall ensure that the average interest rate on loans sanctioned during a quarter does not exceed the average borrowing cost during the preceding quarter plus the margin.

The central bank on Thursday also relaxed commercial paper (CP) issuances by lowering the minimum required credit rating to A3 from A2 as well as the ticket size from Rs 10 lakh to Rs 6 lakh, to widen the bond market.

It also allowed non-resident Indians (NRIs) access to the exchange-traded currency derivatives (ETCD) market to hedge currency risk arising out of their investments in India, a move aimed at providing them additional heding options. Currently NRIs are permitted to hedge their rupee currency risk through OTC transactions with AD banks.

With PTI inputs

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