The Reserve Bank of India (RBI) has defended its decision to withdraw Rs 2,000 currency notes from circulation, stating that it is a "currency management exercise" and not demonetization.

Senior Advocate Parag P. Tripathi made the submission before a division bench comprising Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad during the hearing of the public interest litigation challenging the Reserve Bank of India's decision to withdraw Rs 2,000 currency notes from circulation.

The RBI made this statement before the Delhi High Court during the hearing of a public interest litigation (PIL) challenging the decision. The PIL was filed by Advocate Rajneesh Bhaskar Gupta, who argued that the RBI does not have independent power under the Reserve Bank of India Act to make such a decision.

The petitioner contended that the decision to withdraw the Rs 2,000 notes after 4-5 years of circulation within a specific deadline is "unjust, arbitrary, and against public policy."

The petitioner argued that only the central government should have the authority to make such a decision, and the RBI Act does not grant the RBI the power to do so independently.

The PIL also claimed that the RBI's decision to withdraw the notes without providing a clear reason, except for the "Clean Note Policy," is a "big arbitrary decision" that has not taken into account the expected problems faced by the public. The petitioner further stated that the withdrawal of the Rs 2,000 notes will cause inconvenience to small vendors and shopkeepers and questioned the benefit to the RBI or the national economy.

The PIL highlighted that the Rs 2,000 notes are in good condition and do not require withdrawal under the Clean Note Policy, which typically applies to damaged, counterfeit, or soiled banknotes.

The petitioner argued that a significant amount of public funds has been spent on printing these notes, which would go to waste due to their withdrawal.

The PIL expressed concern that the RBI's notification could lead to citizens lining up at banks, similar to the situation during the demonetization of Rs 500 and Rs 1,000 notes in 2016, potentially causing loss of life.

In a related matter, the same bench of the Delhi High Court reserved judgment on another PIL challenging the RBI and State Bank of India's notifications that allow the exchange of Rs 2,000 currency notes without requiring any identity proof.

This plea was filed by BJP leader and Advocate Ashwini Kumar Upadhyay, who argued that the notifications are arbitrary and violate Article 14 of the Indian Constitution.