Banking Project
Banking Project
Banking Project
OF INDIA
Vs
RESERVE BANK OF INDIA
Name of the Case Internet and mobile association of India
vs Reserve bank of India
Citation (2020 SCC online SC 275 )
Date of the Case March 4,2020
Appellant Internet and mobile association of India
Respondent Reserve Bank of India
Bench / Judge Rohinton Fali Nariman, Aniruddha Bose,V.
Balasubramanian
Statutes / Constituents Involved Banking Regulation Act, 1949. The payment and
settlement system act 2007, Article 19(1)(g) of the
Constitution of India,1949, Payment of wages act,
1936, The general clauses act,1897
1. Did RBI’s authority include VC regulations as this currency was nothing more than a tradable
2. Even if VCs were within the RBI’s regulatory jurisdiction, did the Circular
• RBI In response to the petitioner’s concerns, the bank stated that it has the authority to control virtual money under the
Reserve Bank of India Act of 1934, the Banking Regulation Act of 1949, and the Payment and Settlement Act of 2007.
• It does not infringe on any of the essential rights provided by articles 14, 19, and 21 of the Indian constitution. The
companies controlled by the RBI have no absolute rights, and virtual currency is not completely prohibited.
• According to the respondent, the circular is not excessive because the RBI granted their firms three months to end their
links with virtual currency. Furthermore, for the past five years, the bank has issued warnings to stakeholders about the
• Furthermore, the RBI ruled that, while virtual money cannot be recognized as a currency and does not fall under the
purview of the payment system, it has the potential to become a parallel payment system, which provides the RBI the
• The court referenced the case of “State of Maharashtra v. Indian Hotel and Restaurant Association” in the current case
of “Internet and Mobile Association of India v. Reserve Bank of India.” In this case, the court determined that the petitioner
had incurred at least some degree of harm in order to rule in their favor.
• The petitioner’s first point was that virtual money was not legal cash but rather a commodity over which the RBI has no
regulatory power. Using definitions provided by numerous authorities, governments, and courts, the court concluded that, while
virtual currency does not attain the status of legal cash, it can nevertheless be used as real money.
• The court further noted that the contested circular did not outright ban the usage or exchange of virtual money. The circular
solely applied to RBI-regulated organizations and instructed them not to interact with or offer services to individuals or entities
dealing with virtual currency.
• After conducting an in-depth examination of all the arguments presented, the Supreme Court ruled that the RBI circular is
unenforceable and illegal due to a lack of proportionality. The court further directed the RBI to instruct the central bank of India
not to freeze the accounts and to refund the reward to the petitioner with interest.
CONCLUSION
• The court overturned the circulation issued by RBI, but said that virtual bill, called
the ban on cryptocurrencies and the regulation of official digital currencies issued
by RBI, was declared illegal and therefore unenforceable. Did not declare. The
court overturned the circulation issued by RBI but did not declare that
cryptocurrencies were legal or illegal. Cryptocurrencies are not regulated in India
because there is no law on this issue and was drafted in connection with the legal
status of Indian cryptocurrencies, but the same.