Delhi High Court asks Reserve Bank of India to respond to plea for ‘uniform banking code’ for foreign exchange transactions

Bench observes that the matter deserved a detailed hearing and granted six more weeks to the Centre to file a reply to the petition

December 05, 2022 05:53 pm | Updated 09:37 pm IST - New Delhi

File image.

File image. | Photo Credit: Reuters

The Delhi High Court on Monday asked the Reserve Bank of India (RBI) to respond to a petition seeking implementation of a “uniform banking code” for foreign exchange transactions to check the generation of “black money” and benami transactions.

A Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad observed that the matter deserved a detailed hearing. It also granted six more weeks to the Centre to file a reply to the petition and posted the case for further hearing on March 20.

Additional Solicitor General Chetan Sharma, representing the Centre, submitted that the petition had raised a serious issue which shall be considered by the government.

The petition filed by advocate Ashwini Kumar Upadhyay raised the issue of loopholes in the system in relation to the transfer of foreign funds which could be used by separatists, Naxals, Maoists, fundamentalists, and terrorists.

Mr. Upadhyay has sought direction to ensure that Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT) and Instant Money Payment System (IMPS) transactions are not used for depositing foreign money in Indian banks.

He said this was not only harming India’s foreign exchange reserves but also providing money to “separatists, fundamentalists, Naxals, Maoists, terrorists, traitors, conversion mafias, and radical organisations”.

The plea said the deposit details in Indian banks, including foreign bank branches for foreign exchange transactions, must be in the same format, whether it was an export payment in a current account or salary in a savings account or donation in a charity’s current account or service charges payable in a YouTuber’s account. The format should be uniform, whether it was converted by Western Union or a national bank or an India-based foreign bank, the plea said.

“Foreign Inward Remittance Certificate (FIRC) must be issued and all international and Indian banks must send the link through SMS to get FIRC automatically in case foreign exchange is being deposited in the account as converted INR (Indian Rupee),” the plea said.

“Moreover, only a person or company should be permitted to send Indian rupees from one bank account to another bank account inside the territory of India through RTGS, NEFT and IMPS and international banks should not be allowed to use these domestic banking transactions tools,” it has said.

The plea has also sought direction that foreign exchange transactions through Indian banks and foreign banks’ branches in India must have information, including the name and mobile number of the depositor and the name of the currency, and be carried out via International Money Transfer (IMT) and not RTGS/NEFT/IMPS.

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