Delhi High Court Hears RBI Defend its Decision to Withdraw Rs 2000 Note

NEW DELHI: Withdrawal of Rs 2000 notes is not ‘demonetisation’ but a statutory exercise, the Reserve Bank of India (RBI) on Tuesday (May 23) explained to the Delhi High Court.

RBI said the decision was taken in order to enable their exchange for operational convenience.

Advocate Ashwini Kumar Upadhyay’s plea that the notifications enabling exchange of Rs 2000 banknotes by the RBI and SBI without proof were made arbitrarily and against the laws passed to minimise corruption, was up for hearing before the court.

Delhi HC bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad said a relevant order will be passed on the public interest litigation (PIL) filed by the lawyer.

The court said, "We will look into it. We will pass an appropriate order.”

Upadhyay clarified that the plea was not meant to challenge the RBI’s decision to withdraw the Rs 2000 currency note but to criticise the exchange of the banknote without a slip or identity proof.

The advocate pointed out that the exchange of Rs 2000 notes should be allowed by way of deposit in bank account.

Upadhyay said, "Why is ID proof excluded ? Every poor has a Jan Dhan account. BPL persons are also connected to bank accounts.” He also claimed that the present means of exchange would only help mafias and gangsters, as well as Maoists.

Senior advocate for the RBI Parag P Tripathi, stressed that such matters are not interfered with by the court and explained that operational convenience was the reason why the decision was taken for exchange of the Rs 2000 currency note.

Tripathi maintained that "This is not demonetisation. Rs 2000 banknote was not commonly used. Other denominations continue to meet currency requirements.”

He went on to say that it is a statutory exercise and that none of the points claimed by the petitioner impinged or dealt with constitutional issues.

After hearing both parties, the court said, "Arguments heard. Judgement reserved.”

Petitioner Upadhyay had petitioned that notifications by the RBI and SBI for exchange of Rs 2000 banknotes without a requisition slip or identity proof were arbitrary and went against Article 14 of the Indian Constitution.

The petition stated that a large amount of the currency notes has either entered lockers of individuals or "been hoarded by the separatists, terrorists, Maoists, drug smugglers, mining mafias & corrupt people".

It was also highlighted in the petition that high value currency cash transactions facilitated corruption and used for illegal activities like terrorism, naxalism, separatism, radicalism, gambling, smuggling, money laundering, kidnapping, extortion, bribing and dowry, etc.

The plea said that people having black money and disproportionate assets could be identified easily if Rs 2000 currency notes are deposited in bank accounts.

On May 19, withdrawal of ₹ 2,000 currency notes from circulation was announced by the Reserve Bank of India (RBI). The central bank also said existing notes currently in circulation could be deposited in bank accounts or exchanged by September 30.

The RBI said in a statement that bank notes of Rs 2,000 denomination will continue to be a legal tender.

The RBI also said that exchange of Rs 2,000 bank notes into other denomination bank notes can be done up to a limit of Rs 20,000 at a time at any bank starting from May 23, for operational convenience and to avoid disruption of regular activities of bank branches.

State Bank of India (SBI), in a communication to the chief general manager of all its local head offices, informed that the exchange of Rs 2,000 notes by public up to a limit of Rs 20,000 at a time is to be allowed without procuring any requisition slip.

The communication dated May 20 also said that no identity proof is required at the time of exchange.

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