New Delhi | The Delhi High Court will hear on Tuesday a public interest litigation against permission to exchange Rs 2,000 denomination banknotes without obtaining any requisition slip and identity proof.
The plea was filed by lawyer Ashwini Kumar Upadhyay on Monday.
Upadhyay mentioned the case before a bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad for an urgent hearing today itself. The court, however, declined the request.
The petitioner contended in his plea that notifications by the RBI and SBI enabling exchange of Rs 2,000 currency notes without requisition slip and identity proof were arbitrary, irrational and offend Article 14 (equality before law) of the Constitution of India.
The petition said a large amount of currency notes has reached either individuals' locker or "hoarded by the separatists, terrorists, Maoists, drug smugglers, mining mafias & corrupt people”.
The petition said cash transactions in high value currency are the main source of corruption and are used for illegal activities like terrorism, naxalism, separatism, radicalism, gambling, smuggling, money laundering, kidnapping, extortion, bribing and dowry, etc., and the RBI and SBI should ensure that Rs 2,000 denomination banknotes are deposited in bank accounts alone.
"Recently, it was announced by the Centre that every family should have Aadhaar card and bank account. Therefore, why RBI is permitting to exchange Rs 2,000 banknotes without obtaining identity proof. It is also necessary to state that 80 crore BPL families receive free grains. It means 80 crore Indians rarely use Rs 2,000 banknotes.
"Therefore, petitioner also seeks direction to RBI and SBI to take steps to ensure that Rs 2,000 banknotes are deposited in bank account only," the plea stated.
Depositing Rs 2,000 currency notes in bank accounts will ensure those having black money and disproportionate assets are identified easily, the plea said.
On May 19, the Reserve Bank of India (RBI) had announced withdrawal of Rs 2,000 currency notes from circulation, and said existing notes can either be deposited in bank accounts or exchanged by September 30.
The banknotes in Rs 2,000 denomination will, however, continue to be a legal tender, the RBI said in a statement.
In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, the RBI said exchange of Rs 2,000 bank notes into bank notes of other denominations can be made up to a limit of Rs 20,000 at a time at any bank starting from May 23.
In a communication to chief general manager of all its local head offices, State Bank of India (SBI) informed that the facility of exchange of Rs 2,000 notes by public up to a limit of Rs 20,000 at a time will be allowed without obtaining any requisition slip.
"Further, no identity proof is required to be submitted by the tenderer at the time of exchange," the communication dated May 20 said.
New Delhi | Cash purchase of fuel at petrol pumps using Rs 2,000 notes has spiked to almost 90 per cent of daily sales as buyers rushed to tender the withdrawn currency notes.
Petrol pump dealers said cash sales before the surprise announcement on Friday of the withdrawal of the Rs 2,000 note was only 10 per cent, but now customers were using the withdrawn note to make small purchases of Rs 100/200, expecting petrol pumps to return change.
They have now asked the Reserve Bank to instruct banks to provide enough small denomination notes to help serve customers smoothly.
"Majority of the customers are trying to use Rs 2,000 notes even for small purchases of Rs 100-200 and are expected change from the petrol pumps and hence the petro outlets are extremely short of change across the country," All India Petroleum Dealers Association president Ajay Bansal said in a statement.
It said the petrol pump dealers have been requesting customers to use the card or digital payment for fuel purchases.
"Before this Rs 2,000 withdrawal, we used to receive only 10 per cent of our cash sales through Rs 2,000 notes, but now almost 90 per cent of cash received at our outlets is in the form of Rs 2,000 notes only, and we have to deposit the same in banks on daily basis," it noted.
Petrol pumps and some other daily essential services were allowed to accept old 500 and 1,000 rupee notes after November 8, 2016, demonetisation of nearly 86 per cent of the currency notes. Petrol pumps, however, soon turned into outlets to launder banned currency notes, leading to the government prematurely withdrawing the facility.
This time too petrol pumps have become outlets to get the withdrawn currency out.
"We also request the RBI to give guidelines to banks for providing enough small denomination notes, especially to petrol pumps in lieu of Rs 2,000 notes, so that we can smoothly service our customers," Bansal said.
He expressed apprehension that petrol pump dealers would again face problems as they did during the 2016 demonetisation when most dealers got income tax notices or were raised "without any fault" of theirs.
"Also the digital payments, which used to be 40 per cent of our daily sales, have suddenly gone down to 10 per cent of daily sales, and our cash sales have increased dramatically, as customers are desperately trying to use Rs 2,000, which will again create trouble for us with income tax authorities," he said.
The Rs 2,000 currency notes constitute around 10.8 per cent of total currency in circulation or Rs 3.6 lakh crore. The notes can be exchanged or deposited till September 30, 2023.
Compared to demonetisation, this time, the quantum of currency being withdrawn is significantly smaller and the period to complete the process is more spread out.
In November 2016, 85 per cent of the currency in circulation was withdrawn, with old 500 and 1,000 rupee notes ceasing to be legal tender. The entire process was completed over a shorter time period.
This time a small quantity of currency in circulation will be impacted (10.8 per cent), and the Rs 2,000 note remains legal tender. The entire process will be completed by September 2023.