RBI Instructions To Banks For Discontinuation Of Rs 2,000 Notes Cannot Be Termed As 'Demonetization'

According to the Delhi High Court, the categorization of the Reserve Bank of India's (RBI) instructions to banks regarding the discontinuation of ₹2,000 notes from their currency chests as 'demonetization' cannot be justified as long as these notes remain as legal tender. Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad of the Division Bench observed that the RBI's notification on the exchange of ₹2,000 notes mentioned that this currency had fulfilled its purpose and its printing was halted in the fiscal year 2018-19.

In the course of dismissing a Public Interest Litigation (PIL) filed by Advocate Rajneesh Bhaskar Gupta challenging the Reserve Bank of India's (RBI) decision on the exchange of ₹2,000 notes, the Court provided its observations.

Gupta contended that the RBI lacked independent authority under the RBI Act to discontinue banknotes. He argued that only the Central government had the power to discontinue banknotes, and there was no evidence of any such order being issued by the government.

After considering the arguments, the Bench clarified that the fact that the permission to exchange ₹2,000 notes was available only until September 23, 2023 did not imply that the RBI had directed the demonetization of ₹2,000 banknotes from that date.