₹2,000 currency notes | RBI doesn’t have power to withdraw banknotes, petitioner tells High Court; court reserves verdict

The petitioner submitted that the Reserve Bank of India cannot withdraw from circulation or discontinue banknotes and only the Central Government is vested with such powers

The Reserve Bank of India (RBI) cannot withdraw from circulation or discontinue banknotes and only the Central Government is vested with such powers, the Delhi High Court was told on May 30.

The submission was made by the petitioner Rajneesh Bhaskar Gupta who has filed a public interest litigation (PIL) challenging the RBI’s decision to withdraw ₹2,000 denomination currency notes from circulation.

A Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad reserved its order on the PIL after hearing the counsel for the petitioner and the RBI.

The petitioner submitted that the RBI has no independent power to direct non-issuance or discontinuance of banknotes of any denominational value and this power is vested only with the Centre under section 24 (2) of the RBI Act, 1934.

Senior advocate Sandeep P. Agarwal, appearing for Mr. Gupta, wanted to know as to how the RBI came to the conclusion that the life span of these notes is only 4-5 years.

“The RBI’s power is restricted only to issue and re-issue banknotes under Section 22 and 27 of the RBI Act, but the period for issuing such notes is fixed by the Central Government,” the senior counsel argued.

On the High Court’s May 29 judgment on a PIL which had challenged the notifications by the RBI and SBI enabling exchange of ₹2,000 banknotes without a requisition slip and identity proof, Mr. Agarwal said that was a completely different issue.