Bombay HC rules RBI circulars on demonetisation inconsistent

Hearing a petition filed by the district co-operative banks, which have been banned from exchanging and depositing the defunct Rs 500 and Rs 1,000 rupee notes, the Bombay High Court on Monday observed that there were inconsistencies between the two circulars issued by the RBI on November 8 and 14.

The circular issued on November 8 mentioned that Rs 500 and Rs 1,000 notes would be banned, but that people would be able to exchange or deposit the currencies at all banks. However, the one issued on November 14 mentions that district co-operative banks would not be able to carry out any transaction related to the defunct notes.

A bench of Justices Abhay Oka and Anuja Prabhudesai has asked the RBI to reply. He also asked additional solicitor general of India, Anil Singh, who appeared for the Central government, to get a copy of the transfer petition filed by the government in the Supreme Court.

Senior counsel Janak Dwarkadas, who appeared for one of the petitioners, Mumbai District Central Co-Operative bank, said several customers were facing problems due to RBI’s decision. He added, “Nearly 50 lakh customers are getting inconvenienced.” Following the Mumbai bank, several others even approached the HC over the issue.

Authorities of the Mumbai bank also claimed that they have nearly 1 lakh bank accounts, which includes 12,285 of housing co-operative societies and hence the circular issued by RBI was arbitrary, discriminatory and illegal in nature.

Justice Oka has kept the matter for further hearing on Wednesday and has asked RBI and the Central government to file their replies.

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