Foreign Exchange Transactions: RBI Given 6 Weeks Time To Respond

The Delhi High Court recently granted six more weeks’ time to the Reserve Bank of India (RBI) to respond to a PIL seeking the implementation of a Uniform Banking Code for foreign exchange transactions to control black money generation & benami transactions.

Time was sought for filing a reply by the counsel for RBI from a bench comprising Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad which was hearing the plea by advocate Ashwini Kumar Upadhyay.

Therefore, the petitioner has contended that there are loopholes in the system in relation to the transfer of foreign funds which could be used by separatists, naxals, Maoists, fundamentalists, and terrorists.

The court stated that the matter was listed for further hearing in July “Counsel for RBI prays for six weeks to file a reply as RBI has been recently impleaded as one of the respondents. He is granted six weeks’ time.”

On December 5 last year, the court observed that the matter deserved a detailed hearing and asked RBI to file its response to the petition.
The petition has sought direction to ensure that Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT), and Instant Money Payment System (IMPS) are not used for depositing foreign money in Indian banks.

The petitioner has said it is not only harming the foreign exchange reserve of India but is also being used to provide money to separatists, fundamentalists, naxals, Maoists, terrorists, traitors, conversion mafias, and radical organizations like the SIMI & PFI.

He has submitted that immigration rules for a visa are the same whether a foreigner comes in business class or economy class, uses Air India or British Airways, and comes from USA or Uganda.

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

It further said that “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 the foreign exchange is being deposited in the account as converted INR. 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.”

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

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About the Author: Meera Verma