Prohibition on investing in cryptocurrencies:You cannot invest in virtual currency by sending money abroad, ICICI Bank’s decision

  • Bank has made changes in its Retail Outwards Remittance Application Form
  • People are sending money out to invest in crypto. Because the situation in India is not clear yet

If you are thinking that you can send money abroad and invest it in cryptocurrencies, then it will not happen now. The country’s largest private bank ICICI Bank has banned this.

Will have to tell when sending money abroad

ICICI Bank has told its customers that whenever they send money abroad, they will have to specify that they will not invest it in crypto. For this, the bank has made changes in its ‘Retail Outwards Remittance Application Form’. According to this, customers will have to submit an outward remittance application form. This would require customers to sign for money transfers to buy stocks and properties abroad under the RBI Liberalized Remittance Scheme (LRS). The LRS declaration is not limited to direct investment in cryptocurrencies.

Customers have to agree to what the bank says

Customers must also agree that LRS Remittances will not be invested in units of mutual funds or shares or any other resources of a company dealing in bitcoin. After shutting down most banking services for crypto exchanges, ICICI Bank has now asked its customers not to use the Reserve Bank’s Liberalized Remittance Scheme (LRS) for crypto-related investments.

Bank changed the form

As part of the announcement under FEMA, the bank has made changes in its Retail Outwards Remittance Application Form. Here customers have to declare that the proposed investments will not be used for purchase of crypto assets. The declaration states that the remittances mentioned above are for investments in bitcoin/cryptocurrencies, virtual currencies (such as ethereum, ripple, litecoin, dash, peercoin, dogecoin, primecoin, chinacoin, venn, bitcoin or any other virtual currency, cryptocurrency, bitcoin) or Not for purchase.

Bank has put condition for customers

ICICI Bank customers have to agree to all these terms to avail LRS. LRS has been a major instrument for crypto investment. The founder of a crypto exchange said that after such an announcement by ICICI Bank, other major banks will also close LRS doors for crypto investments. This will affect the transactions of the Indian crypto market.

LRS was introduced by the Reserve Bank in 2004.

LRS was introduced on February 4, 2004 under the legal framework of the Foreign Exchange Management Act, 1999. Under the Liberalized Remittance Scheme, authorized dealers can freely allow remittance by the resident up to a financial year (April-March) for any account or transaction or both. This scheme is not available for Corporates, Partnership Firms, Trusts etc.

People trying to invest money in crypto

A lot of people are trying to invest their money in crypto. Although most people are not sure what is going to happen in India regarding this. That’s why they are preferring to use LRS to invest in crypto and send it outside the country. Because the Indian government has not allowed it here due to various reasons.

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