The National Federation of Urban Co-operative Banks and Credit Societies Ltd (NAFCUB), a top-level advocacy body for urban cooperative banks and credit societies, says credit societies need prior approval from authorities before they can ” offer crypto assets to their members.
One of the cooperative banks – United Multi State Credit Co-operative Society, which has claimed to have a connection to Cashaa, a player in crypto assets, plans to offer virtual currencies starting next month. United is a multi-state cooperative credit society registered under the Multi-State Cooperative Societies Act, 2002.
Cashaa founder Kumar Gaurav has been quoted in the media as saying they do not need RBI clearance for this model. “United is also a member of the National Federation of Urban Co-operative Banks and Credit Companies Ltd (NAFCUB) under number 1753 and ISO 9001: 2008 certified for quality management systems,” he said.
This statement is not true, however.
BusinessToday.In spoke with Ramesh Mantri, board member of the umbrella organization NAFCUB. “They (United Multi State) haven’t renewed members for 5-6 years. They aren’t even interested in renewing or maintaining membership,” Mantri said.
“I feel something is wrong or illegal,” warns Mantri, whose body represents 1,600 cooperative banks and more than 50,000 cooperative credit societies across India.
Cashaa, which is not a regulated financial institution, has launched Unicas, which it claims to be the world’s first crypto-enabled financial institution with physical branches in India. The company linked to the United Multistate Credit Co-operative Society, present in Delhi and Rajasthan, has ambitious plans to launch savings account services in Indian rupees and also in cryptocurrency, providing loans for the purchase of cryptoassets, and also lending against the crypto wallet.
The RBI had previously raised concerns about crypto assets, particularly from the perspective of consumer protection, the integrity of the player market and also the possibility of money laundering activity. In March last year, the Supreme Court overturned the RBI’s April 2018 circular directing banks to refrain from trading cryptocurrencies. The Supreme Court has in fact authorized trading and investing in crypto assets.
In fact, some private sector banks were still using the old RBI circular to warn clients against investing in crypto assets as the government was seriously considering passing some sort of legislation or banning crypto altogether. currencies.
In May of this year, the RBI also clarified that banks should avoid using an old RBI circular to warn the public or their customers about crypto assets.
Obviously, there are a lot of gray areas that some players are trying to take advantage of.
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