Indian Government has decided to take measures to stop the use of cryptocurrencies in funding illegal activities.
On August 10, the Minister of State for Finance Pankaj Chaudhary, presented a written reply to the Rajya Sabha, specifying that the government will initiate a research program to learn more about blockchain technology, to usher it in the digital economy.
“The government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system,” he said.
A High-Level Inter-Ministerial Committee (IMC), which has been under the Chairmanship of Secretary (Economic Affairs), examines the digital asset to find issues related to it. The committee, in its report, suggested that all private cryptocurrencies, except for those issued by the State, should be prohibited in India.
The minister further stated in the Parliament that the government is going through IMC’s recommendation to take a decision on it.
Later, the Minister of State for Finance Bhagwat Karad talked about the money recovered by Public Sector Banks (PSBs). He mentioned that in five years, the PSBs have been able to recover Rs. 4,52,480 crore from the defaulters in NPA and written-ff accounts.
As per the report presented by Karad, till March 31, 2021, the aggregated recovery of money was Rs. 20,334 crores and these defaulters wilfully deposited their money.
Since 2019, the Reserve Bank of India (RBI) has been collecting the data of wilful defaulters and according to that, the increase in the total number of unique wilful defaulters reported by nationalized banks was 248 during 2019-20, but during 2020-21, it decreased to 156.
He further mentioned, “The gross NPAs reported by public and private sector banks to CRILC (including exposures that are not categorized as corporate exposure on account of being between ₹5 crores and ₹7.5 crores) accounted for 66.8 percent of the total gross NPAs.”