File picture. | photo credit: Reuters
The Delhi High Court on Monday ordered the Reserve Bank of India (RBI) to respond to a petition seeking the implementation of a “uniform banking code” for foreign exchange transactions to verify the generation of “money black” and Benami transactions.
A bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad commented that the case merited a detailed hearing. He also gave the Center an additional six weeks to file a response to the motion and released the case for a rehearing on March 20.
Additional Solicitor General Chetan Sharma, representing the Centre, argued that the petition raised a serious issue that needs to be addressed by the government.
The petition filed by lawyer Ashwini Kumar Upadhyay raised the issue of loopholes in the system regarding the transfer of foreign funds which could be used by separatists, Naxals, Maoists, fundamentalists and terrorists.
Mr Upadhyay requested instructions to ensure that Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT) and Instant Payment System (IMPS) transactions are not used to deposit money. foreign money in Indian banks.
He said it not only hurt India’s foreign exchange reserves but also provided money to “separatists, fundamentalists, Naxals, Maoists, terrorists, traitors, conversion mafias and radical organisations”.
The plea stated that details of deposits in Indian banks, including branches of foreign banks for foreign exchange transactions, should be in the same format whether it is an export payment in an account current or salary in a savings account or a donation in a charity’s checking account or service charge payable to a YouTuber’s account. The format must be uniform whether converted by Western Union, a domestic bank or a foreign bank based in India, according to the plea.
“Foreign Inward Remittance Certificate (FIRC) should be issued and all international and Indian banks should send the link via SMS to get the FIRC automatically in case currency is deposited in the account as converted INR (Indian rupee),” the plea said.
“Furthermore, only a person or company should be allowed to send Indian rupees from one bank account to another bank account inside Indian Territory through RTGS, NEFT and IMPS and international banks should not be allowed to use these domestic banking transaction tools,” he said.
The plea also requested that foreign exchange transactions through Indian banks and branches of foreign banks in India must contain information, including the name and mobile number of the depositor and the name of the currency, and be made via international money transfer (IMT) and not RTGS/NEFT/IMPS.
