Tuesday, March 28, 2023

Delhi High Court seeks response from Centre in plea seeking implementation of Uniform Banking Code for foreign exchange transactions

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The Delhi High Court on Tuesday sought response from the Centre upon a plea seeking implementation of a Uniform Banking Code for Foreign Exchange Transaction in order to control black money generation and benami transaction.

The Division Bench comprising Acting Chief Justice Vipin Sanghi and Justice Navin Chawla, while dealing with a petition filed by BJP leader and practising Advocate Ashwini Kumar Upadhyay, issued notice to the Ministry of Home Affairs, Ministry of Law & Justice and Ministry of Finance.

The Bench directed the respondents to file their response or status report within next four weeks.

At the outset, Public Interest Litigation activist Upadhyay knocked the doors of the Delhi High Court highlighting the existing loopholes and lapses in the system with regard to transfer of foreign funds in Indian Banks which could be used by separatists, fundamentalists, naxals, maoists, terrorists, traitors and radical organizations operating to destabilize the country.

Upadhyay alleged that money could be transferred into Indian bank accounts from any foreign source by way of Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT) and Instant Money Payment System (IMPS), which are tools meant for transfer of funds within the country.

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In light thereof, he sought for a direction that such domestic tools shall not be used for depositing the foreign money and only the International Money Transfer (IMT) mode be permitted to be utilized for transfer of foreign funds into Indian bank accounts as that would leave a stamp with regard to the identity of the source of the funds.

The plea stated that to track black money, Centre must take steps to ensure that foreign exchange transaction is not done without giving Full Name, PAN, AADHAAR, Mobile and other details of depositor and drawer.

“Similarly, Centre must make it compulsory to have Electronic Fund Transfer at Point of Sale (EFTPOS) or Mobile Phone Payment System (MPPS) for manufacturers distributors retailers and services providers to control black money generation”

-the plea added.

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It is further stated that-

“Foreign Inward Remittance Certificate (FIRC) must be issued and All International and Indian banks must send the link through SMS to get FIRC automatically in case Foreign Exchange is being deposited in the account as converted INR.”

According to the petitioner, these steps will control the menace of bribery, black money, benami transaction, tax evasion, money laundering, profiteering, grain hoarding, food adulteration, human trafficking, drug trafficking, black marketing, fraud, dishonest misappropriation of property, criminal breach of trust, dishonestly inducing delivery of property, cheating by personation, concealment of property, falsification of accounts, and economic offences including corporate fraud, capital market fraud and forensic fraud and violation of the laws relating to accounting, company, taxation and information technology.

During the course of the hearing, Additional Solicitor General Chetan Sharma submitted that the issue raised in the petition requires examination and that the Centre will seriously look into the same.

The matter will next be taken up on May 25, 2022.

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