The Reserve Bank of India (RBI) told the Delhi High Court on Tuesday that the decision to allow the exchange of Rs 2000 notes was made for operational convenience and that the withdrawal of these notes is not a result of demonetisation but rather a statutory process.
Lawyer Ashwini Kumar Upadhyay was arguing in court that the RBI and SBI’s notices allowing the exchange of Rs 2000 banknotes without a receipt were arbitrary and in violation of the rules intended to fight corruption.
A bench made up of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad announced that it would issue the proper ruling regarding the attorney’s public interest lawsuit. “We’ll investigate it.” The court announced that a suitable order would be passed.
Upadhyay clarified that he is not challenging the decision to withdraw Rs 2000 banknote but criticises the exchange of the currency without any slip or identity proof. He asserted that the exchange of Rs 2000 banknote should be allowed through deposit in bank account.
“Why is ID proof excluded ? Every poor has a Jan Dhan account. BPL persons are also connected to bank accounts,” Upadhyay said while claiming that the present arrangement would only enable mafias and gangsters like “Atiq Ahmed’s henchmen” as well as Naxals.
For the RBI, senior lawyer Parag P Tripathi highlighted that the court cannot get involved in such things and that the decision to enable the exchange of the Rs 2000 currency note was made for operational reasons.
“This is not demonetisation. Rs 2000 banknote was not commonly used. Other denominations continue to meet currency requirements,” he said.
“This is a statutory exercise. None of the points claimed by the petitioner impinge or deal with constitutional issues,” Tripathi added.
“Arguments heard. Judgement reserved,” the court said after hearing the parties. The petitioner has contended in his plea that notifications by the RBI and SBI enabling exchange of Rs 2000 banknotes without requisition slip and identity proof were arbitrary, irrational and offend Articles 14 of the Constitution of India.
According to the petition, a large portion of the money has either ended up in people’s lockers or has been stockpiled by separatists, terrorists, Maoists, drug smugglers, mining mafias, and unscrupulous individuals.
The main source of corruption, according to the petition, is cash transactions involving high-value notes that are used for illegal activities like terrorism, naxalism, separatism, radicalism, gambling, smuggling, money laundering, kidnapping, extortion, bribery, and dowry, among others. The RBI and SBI should make sure that only banknotes worth Rs 2000 are deposited in their respective bank accounts.
“Recently, it was announced by the Centre that every family should have Aadhaar card and bank account. Therefore, why RBI is permitting to exchange Rs 2000 banknotes without obtaining identity proof. It is also necessary to state that 80 crore BPL families receive free grains. It means 80 crore Indians rarely use Rs 2,000 banknotes. Therefore, petitioner also seeks direction to RBI and SBI to take steps to ensure that Rs 2000 banknotes are deposited in bank account only,” the plea stated.
According to the petition, placing Rs 2000 notes in bank accounts would make it easier to identify those with hidden assets and illicit money.
The Reserve Bank of India (RBI) declared on May 19 that it would remove Rs 2,000 notes from circulation and that those still in use could either be deposited in bank accounts or exchanged by September 30.
The RBI announced in a statement that the bank notes with a face value of Rs 2,000 will remain legal currency.
The exchange of Rs 2,000 bank notes into bank notes of other denominations can be made up to a ceiling of Rs 20,000 at a time at any bank beginning on May 23 in order to maintain operational convenience and prevent disruption of regular activities of bank branches.
State Bank of India (SBI) told the chief general managers of all its local head offices that the public will be able to exchange Rs 2,000 notes up to a maximum of Rs 20,000 at a time without needing to get a requisition slip.
“Further, no identity proof is required to be submitted by the tenderer at the time of exchange,” RBI issued guidelines on 20 May.
