HC stays RBI’s rejection of PIA request for regularising Indian branches

NEW DELHI, May 31:
The Delhi High Court today stayed Reserve Bank of India’s rejection of Pakistan International Airlines’ request for regularisation of its branches in India.
Justice Rajiv Shakdher put on hold the decision of the Reserve Bank of India (RBI) as it did not disclose why the PIA’s request to regularise its branches was rejected.
The RBI’s lawyer orally told the court that the decision was taken based on a November 2017 letter from the Ministry of Finance (MoF) that PIA’s request has been rejected.
The judge, however, said, “According to me, it (MoF letter) does not lead to any clarity as to why the request was rejected.”
The court, thereafter, asked the Centre, the RBI and the Citibank, PIA’s banker, to file their responses to the airline’s plea challenging the RBI letter and listed the matter for further hearing on July 6.  It also directed the RBI to send a communication to Citibank to allow the airline to operate its accounts.
PIA had sought directions from the RBI to Citibank to allow it to continue using its bank accounts.
The airline, in its plea, has contended that Citibank had written to it that in the absence of permission to regularise the airlines’ branches, PIA would not be allowed to operate its bank accounts.
The national carrier of Pakistan contended that if its accounts are blocked or frozen, undue hardship would be caused to it as it has a monthly expenditure of over Rs 81 lakh. (PTI)