The Delhi High Court on April 5 ordered the center to deal seriously with the issue raised in a public interest litigation (PIL) to implement a unified banking code on foreign exchange transactions to control black money generation and Benami transactions.
A Bench of Acting Chief Justice Vipin Sanghi and Justice Navin Chawla, through the Ministries of Home Affairs, Law and Justice and Finance, addressed a notice to the Center asking them to respond to the petition.
Assistant Attorney General Chetan Sharma, representing the center, said the petitioner raised a serious issue for the government to investigate.
The court, which listed the matter for further hearing on May 25, urged the center “to give serious consideration to the matter raised by the petitioner.”
Petitioner and lawyer Ashwini Kumar Upadhyay pointed to loopholes in the system regarding the transfer of foreign funds that could be used by separatists, Naxals, Maoists, fundamentalists and terrorists.
During the hearing, the ASG said: “He [petitioner] has raised a serious problem. We’ll think about it and get back to you. The issues are serious and important, they require close consideration.”
The petition asked for direction to ensure that Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT) and Instant Money Payment System (IMPS) are not used to deposit foreign funds into Indian banks.
The petitioner said it is not only damaging India’s foreign exchange reserves but is also being used to fund separatists, fundamentalists, Naxals, Maoists, terrorists, traitors, conversion mafias and radical organizations such as SIMI and PFI.
He argued that the immigration requirements for a visa are the same whether a foreigner travels in business class or economy class, uses Air India or British Airways, and is from the US or Uganda.
Likewise, deposit details at Indian banks, including foreign bank branches for foreign exchange transactions, must be in the same format, whether it is export payments in a checking account, or salary in a savings account, or donations in checking accounts to charity, or payable service fees accounts by YouTubers. The format should be consistent whether it’s being converted by Western Union or National Bank or an overseas bank based in India, the plea said.
“Certificate for foreign transfers [FIRC] must be issued and all International and Indian Banks must SMS the link to receive FIRC automatically if foreign exchange is deposited as converted INR on the account. “In addition, only an individual or company should be allowed to transfer Indian rupees from one bank account to another bank account within the territory of India via RTGS, NEFT and IMPS, and international banks should not be allowed to use these tools for domestic banking transactions to use.” it said.
The objection was also aimed at requiring foreign exchange transactions through Indian banks and foreign bank branches in India to include information such as depositor’s name and mobile number, International Money Transfer (IMT) rather than RTGS/NEFT/IMPS and the name of the currency.