Rs 2K currency notes: RBI doesn't have the power to withdraw banknotes, petitioner tells: High Court reserves verdict
The Reserve Bank of India (RBI) can’t pull out from flow or suspend banknotes and just the central government is vested with such powers, the Delhi High Court was told on Tuesday. Rajneesh Bhaskar Gupta, the petitioner, made the argument in his public interest litigation (PIL) against the RBI’s decision to stop issuing currency notes in the denomination of Rs 2,000.
After hearing from the petitioners and the RBI’s attorneys, a bench consisting of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad reserved its decision regarding the PIL.
The applicant presented the RBI has no free ability to coordinate non-issuance or discontinuance of banknotes of any denominational worth and this power is vested exclusively with the Middle under segment 24 (2) of the RBI Act, 1934.
For Gupta, senior attorney Sandeep P. Agarwal wanted to know how the RBI came to the conclusion that these notes only last 4-5 years.
“The RBI’s power is limited exclusively to issue and once again issue banknotes under Segments 22 and 27 of the RBI Act, however, the period for giving such notes is fixed by the Focal government,” the senior guidance contended.
On the high court’s May 29 judgment on a PIL which had tested the warnings by the RBI and SBI empowering trade of Rs 2,000 banknotes without an order slip and character verification, Agarwal said that was something else entirely.
The RBI opposed the request, claiming that it was only removing Rs 2,000 notes from circulation as a “currency management exercise” and economic policy matter.
Senior backer Parag P Tripathi, addressing the RBI, said the high court has previously excused one more PIL on a similar round/notice, and according to the High Court’s organization, a court can’t have sequential PILs on a similar issue.
Ashwini Kumar Upadhyay’s argument that the RBI and SBI’s notifications allowing the exchange of Rs 2,000 currency notes without proof were arbitrary and in violation of laws enacted to combat corruption was dismissed by the high court on Monday, stating that it was done to avoid causing citizens any inconvenience and that the court cannot serve as an appellate authority on a policy decision.
The high court has maintained that black money, money laundering, profiteering, or corruption cannot be attributed to the government’s decision.
According to the petition, the “big arbitrary decision of withdrawing the Rs 2,000 denomination banknotes from circulation without analysis of the expected problems of the public at large” was supported by only the “Clean Note Policy” in the RBI notification.
The plea stated that “RBI has not cleared so far what is the benefit to the RBI or National Economy after withdrawing the denomination Rs 2,000 banknote from circulation.” However, “the hardship to the citizen of the country is very well known and seen during the demonetization of denominations of Rs 500 and Rs 1,000 in the year 2016 and withdrawal of Rs 2,000 is not much different from previous demonetization,” the plea continued. “The withdrawal of the denomination Rs 2,000 banknote is not much different from previous demonetization.”
On May 19, the RBI reported a withdrawal of Rs 2,000 cash notes from the course and said existing notes available for use can either be saved in financial balances or traded by September 30.
The certified receipts in Rs 2,000 group will keep on being a lawful delicate, the RBI said in a proclamation.
The Reserve Bank of India (RBI) announced on May 23 that beginning that day, exchanges of Rs 2,000 bank notes for currencies of other denominations up to a maximum of Rs 20,000 at a time at any bank will be permitted to ensure operational convenience and avoid disrupting the regular activities of bank branches.
The State Bank of India (SBI) informed the chief general managers of all of its local head offices that the public will be able to exchange Rs 2,000 notes for up to Rs 20,000 at a time without obtaining a requisition slip.
“Further, no character verification is expected to be presented by the giver at the hour of trade,” the correspondence dated May 20 said.
