RBI bluntly on 2 thousand notes, this is not demonetisation, it is an exercise of currency management
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New Delhi The Reserve Bank of India (RBI) on Friday told the Delhi High Court that its decision to withdraw Rs 2,000 notes from circulation was only a currency management exercise and not demonetisation. The central bank defended its decision on a PIL filed by petitioner advocate Rajneesh Bhaskar Gupta challenging the RBI decision. The PIL argued that there is a lack of independent authority to take such a decision as per the RBI Act. Senior advocate Parag P. Tripathi, appearing for the bank, urged before the court that the matter be taken up for hearing on a later date as the bench has reserved its order in a similar PIL filed by petitioner advocate Ashwini Upadhyay.
Tripathi said, this is a currency management exercise and not demonetisation. The bench had earlier reserved judgment in a case. I am suggesting let that order come and then we can get to it. The petitioner has argued that withdrawal of notes with a specific time limit after 4-5 years is unjust, arbitrary and contrary to public policy.
The petitioner said, it is outside the jurisdiction of RBI. There is no such provision in the RBI Act that RBI can independently take such a decision.
The court, after hearing the parties, listed the matter for further hearing on May 29.
The parties were asked to submit a brief note in the matter. The court said, the counsel for RBI has informed the court that another petition with the same subject matter has come up for hearing. He prays for the listing on Monday. List on Monday.
The PIL highlights that the circular in question fails to indicate that the decision to withdraw the banknotes has been taken by the Central Government. The petition states that the Reserve Bank of India has not given any explanation other than the clean note policy for taking such a momentous and arbitrary step of withdrawing bank notes from circulation without adequately considering their likely impact on the general public. .
Referring to the provisions of RBI’s Clean Note Policy, the PIL states that damaged, counterfeit or soiled notes of any denomination are generally withdrawn from circulation and replaced with newly printed notes. The petition raised concerns over the impact of the withdrawal of the Rs 2,000 bank note, claiming that small vendors and shopkeepers have already stopped accepting it.
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