The Delhi High Court on Thursday expressed its inability to draft a uniform banking code for foreign exchange transactions, a proposal aimed at curbing black money generation and benami transactions. The court decided that the issue was better handled by pertinent governmental bodies with the necessary expertise and authority.
During the hearing of a Public Interest Litigation (PIL) filed by advocate Ashwini Kumar Upadhyay, the bench led by Chief Justice designate Manmohan and Justice Tushar Rao Gedela directed that the petition be treated as a representation to the Ministry of Finance. The ministry has been tasked to decide on the matter, taking into account inputs from the Ministry of Home Affairs and the Reserve Bank of India (RBI).
Upadhyay’s petition highlighted significant loopholes in the current system for transferring foreign funds, which he claimed could potentially be exploited by separatists, Naxals, Maoists, fundamentalists, and terrorists. He argued that platforms such as Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT), and Instant Money Payment System (IMPS) should not be used for depositing foreign money into Indian banks.
The petition further stressed the need for uniformity in the processing of foreign exchange transactions across various banking platforms, whether it involves export payments, salaries, donations, or service charges. Upadhyay proposed that all international and Indian banks should issue a Foreign Inward Remittance Certificate (FIRC) and provide a link via SMS to retrieve the FIRC automatically when foreign exchange is deposited and converted into Indian Rupees.
Moreover, the plea suggested that only individuals or companies should be allowed to send money through RTGS, NEFT, and IMPS within India, and that international banks should be barred from using these domestic transaction tools.
The High Court acknowledged the complexity and technical nature of the issues raised, which involve intricate aspects of banking regulations and international finance. By directing the Ministry of Finance to consider the petition as a formal representation, the court has effectively shifted responsibility to the executive branch, which is better equipped to address these regulatory challenges.
