Delhi HC seeks RBI response on implementation of Uniform Banking Code

Court also asks Centre to file a reply in the case in six weeks; next hearing on March 20

The Delhi High Court on Monday sought a response from the Reserve Bank of India (RBI) on a plea seeking to apply the Uniform Banking Code on foreign exchange dealings, in order to control black money and Benami transactions.

A bench of Justices Satish Chandra Sharma and Subramonium Prasad issued a notice to the RBI saying the matter needs a detailed hearing.

The court also issued a notice to the Centre to file a reply in the case in six weeks. The next hearing is on March 20.

In the previous hearing, the court had issued notices to the ministries of Home Affairs, Law and Justice, and Finance to respond to the plea.

The Public Interest Litigation (PIL) filed by BJP leader and Advocate Ashwini Kumar Upadhyay sought direction to the authorities to ensure that Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT), and Instant Money Payment System (IMPS) are not used to deposit foreign money in Indian banks as that not only impacts the country's foreign exchange reserves but also serves to provide money to Naxals, separatists, terrorists and other ant-national entities.

The plea said the format of the transaction should be uniform regardless of whether it is converted by Western Union, an Indian bank or a foreign bank with a branch in the country.

Upadhyay said in his plea that Foreign Exchange deals through Indian banks and foreign bank branches must have the depositor's name and mobile number, International Money Transfer (IMT), and not RTGS/NEFT/IMPS, currency, exact amount of foreign currency up to two decimal places, and conversion rate up to three decimal places.

Additional Solicitor General Chetan Sharma, appearing for the Centre on Monday, told the court that the issues raised in the plea are serious and will be considered by the government.

The plea also said that immigration rules for visas are the same regardless of whether a foreigner flies business class or economy, uses Air India or British Airways, and comes from USA or Uganda.

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

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