The chairman of the State Bank of India (SBI) has spoken in favor of cryptocurrency regulation in an interview. He believes that it is necessary to regulate cryptocurrencies. Last week, the chairman attended IMF meetings in Washington, D.C., with Finance Minister Nirmala Sitharaman.
State Bank of India Chairman Rajnish Kumar has reportedly argued for cryptocurrency regulation in India, despite the government considering a bill to ban all cryptocurrencies except state-issued ones. SBI, the largest bank in India and a Fortune 500 company, is a government-owned corporation headquartered in Mumbai.
In an interview with PTI on Thursday, Kumar was asked about cryptocurrency. He replied, “the way the world is moving towards digitization, at some stage, a regulated cryptocurrency would be a better bet than an unregulated one,” the news outlet conveyed, and quoted him as saying:
Let’s see. Because there’s a dark side of the internet also. There can be misuse of the digital currencies. That is why regulation is [a] must.
The chairman added that efforts are being made to bring technologies like blockchain into the functioning of banks, the news outlet noted.
Kumar was in Washington, D.C., last week as part of the Indian delegation led by Finance Minister Nirmala Sitharaman at the annual meetings of the International Monetary Fund (IMF) and the World Bank. At the event, the finance minister and RBI Governor Shaktikanta Das talked briefly about cryptocurrency with respect to Facebook’s Libra digital currency project.
Meanwhile, the government of India has been deliberating on a draft bill to ban cryptocurrency which was submitted to the Finance Ministry back in February. The government has told the supreme court that this bill may be introduced in the next session of parliament. The court is scheduled to hear the writ petitions relating to this bill in January next year. Meanwhile, the supreme court is also addressing the banking restriction on the crypto industry by the central bank, the Reserve Bank of India (RBI). The hearing of this case is scheduled to resume on Nov. 19.
Indian Banking Sector
As for the Indian economy and the banking sector, the SBI chairman said “Growth can come back,” citing a number of reforms that have been implemented in the past three years. “And as a result, we are in a transition period. A lot of cleanup has happened in the corporate sector,” the chairman told PTI.
Kumar explained that the biggest challenge in the Indian banking sector revolves around the functioning of the public sector banks. He opined, “recapitalization has happened in a big way but sectoral issues need to be addressed like the power, road and telecom sectors,” adding that “These sectoral issues impact the working of the banks, particularly on the asset quality front.”
Recently, there have been problems with cooperative banks and public sector banks in India. About 40,000 bank employees from around 10,000 branches of various banks were on strike on Tuesday against the government’s plan to merge 10 public sector lenders into four, to create fewer and stronger global-sized banks. The one-day strike was called by two bank employees unions: All India Banks Employees Association (AIBEA) and Bank Employees Federation of India (BEFI).
“In this process (merger of 10 banks) the government is likely to close around 5,000 bank branches to enable small finance banks from the private sector to occupy the space and thus is privatizing banking business,” AIBEA said. As for SBI, the bank said in a filing to stock exchanges last week that “The membership of our bank employees in unions participating in [the] strike is very few, so the impact of [the] strike on banks operation will be minimal.”
Do you think the Indian government will regulate or ban cryptocurrency in India? Let us know in the comments section below.
Images courtesy of Shutterstock and PTI.
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A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.