Internet and Mobile Association of India v RBI (2020) | Crypto Ban & Proportionality Explained

Banking Law Case 29 of 29 by Law Easy, for LL.B., CLAT PG, UGC NET Law and Judiciary exams. Case: Internet and Mobile Association of India v. Reserve Bank of India (Supreme Court of India, 4 March 2020, judgment by Justice V. Ramasubramanian) FACTS: In April 2018 the RBI directed all entities it regulates, including banks, not to deal in virtual currencies and not to provide services to anyone dealing in them. This cut crypto exchanges off from the banking system. LEGAL ISSUE: Could the RBI impose such a restriction, and was it a proportionate one? JUDGMENT: The RBI has the power to regulate, and even prohibit, such activity, and may act pre-emptively. But the power must be exercised proportionately. The RBI had shown no actual harm to its regulated entities from dealing with crypto exchanges, and had itself said virtual currencies were not banned. The circular was set aside as disproportionate. PRINCIPLE TO REMEMBER: A regulator needs both lawful authority and adequate reasons for the restriction chosen. Having a power and using it proportionately are separate questions. PROVISIONS: Article 19(1)(g) (freedom of trade and profession); doctrine of proportionality; RBI Act, 1934; Banking Regulation Act, 1949; Payment and Settlement Systems Act, 2007. EXAM NOTE: The judgment did not make virtual currency legal tender and did not settle every future regulatory question. India has no comprehensive crypto law at present, although income from virtual digital assets is taxed. Check later statutes and RBI directions separately. PLAYLIST (all 29 Banking Law case laws): https://www.youtube.com/playlist?list=PLbhYsrMKgACA COMPLETE LECTURE (1 hr 46 min): https://youtu.be/ayAN7RLlfPM PREVIOUS CASE (28): SBI v Rajesh Agarwal (2023): https://youtu.be/xG-7i8Wxdrg More law notes: https://www.thelaweasy.com If this helped your preparation, please subscribe to Law Easy for more case law explainers. This video is for education and is not legal advice. #BankingLaw #LawEasy #CLATPG #JudiciaryExam #LLB #CaseLaw #supremecourtjudgment