SC Upholds RBI’s ₹2000 Note Exchange Policy

Dismissing Request SC Upholds RBI’s ₹2000 Note Exchange Policy

SC Dismisses the appeal challenging Delhi HC Verdict on the Exchange of ₹2000 Notes Without Requisition Slip &  ID proof. SC Upholds RBI’s ₹2,000 Note Policy stating it an Executive Decision. The bench of Chief Justice DY Chandrachud and Justice PS Narasimha rejected the appeal filed by lawyer Ashwini Upadhyay. The move, aimed at curbing black money and counterfeit currency, has raised questions about the future of the note in the Indian economy.

Announcement of exchange of ₹2,000 bank notes, is part of RBI’s currency management. ₹2,000 notes were primarily introduced to quickly replenish earlier ₹500 & ₹1,000 notes, says @RBI Governor @DasShaktikanta #RBI pic.twitter.com/s1HcskQoIe

— CNBC-TV18 (@CNBCTV18Live) May 22, 2023

Background

The ₹2,000 note was introduced during India’s November 2016 demonetization campaign to combat corruption, black money, and counterfeit currency. The withdrawal of ₹1,000 and ₹500 notes and the introduction of new denominations, including the ₹2,000 note, received both praise and criticism regarding its practicality and effectiveness.

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Supreme Court Dismissal

Recently, a request was filed in the Supreme Court challenging the RBI’s decision on the exchange of ₹2,000 notes. The petitioner argued that the limitations imposed on exchanging these notes violated citizens’ rights and hindered their ability to use their hard-earned money. The request also raised questions about the government’s handling of demonetization and the impact it had on the economy.

"There's no reason to rush to the bank. There are over four months of time granted till September 30," RBI Governor #ShaktikantaDas says after Rs. 2,000 note was withdrawn.@aakaaanksha reports from ground zero as the banks today start to exchange the Rs.2,000 note – Watch. pic.twitter.com/FeUAyLY8iO

— TIMES NOW (@TimesNow) May 23, 2023

RBI’s Justification

The RBI has provided several reasons to support its decision to limit the exchange of ₹2,000 notes. One of the primary objectives is to prevent the hoarding of high-value currency notes, which could be used for illicit activities such as money laundering and terror financing. The central bank has also expressed concerns about the possibility of counterfeit currency in circulation, noting that the ₹2,000 note is particularly vulnerable to counterfeiting due to its high value.

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High Court Rejects PIL on ₹2,000 Notes:

The Delhi High Court dismissed a PIL challenging the exchange of ₹2,000 notes without a requisition slip or ID proof, stating it aimed to prevent inconvenience and cannot review policy decisions. The court rejected claims of the government’s decision encouraging illicit activities. However, an appeal was filed. The petitioner, Mr. Upadhyay, expressed concerns over criminals and terrorists exploiting the lack of requisition slip and ID proof requirements, potentially misusing the currency.

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