Vol. 3, Issue 1 (2017)
Constitutional validity of demonetization in India
Author(s): Inderjeet Santoshi
Abstract: The Government of India has taken a policy decision that the Bank notes in the denomination of Rs. 500 and Rs. 1000 shall cease to be a legal tender 8th November, 2016 onwards. Simultaneously, bank notes of Rs. 2000 were also introduced, possibly to carry a larger value of money with fewer notes. The Reserve Bank of India Act, 1934 [hereinafter referred to as “RBI Act”] has been enacted inter-alia to regulate the issue of bank notes and keeping of reserves with a view to secure monetary stability in the country and generally to operate the currency and credit system of the country to its advantage. The RBI is the sole note issuing authority and has the obligation to exchange those notes when demanded except when, and to the extent, it is relieved of the obligation by the Central Government. The current article highlights the constitutional validity of demonetization in India.