Decided on January 03,2019

Visual Securas Limited Appellant
UNION OF INDIA Respondents


Shampa Sarkar,J. - (1.) The writ petitioners are engaged in the business of cash transportation activities under the respondent No.5, namely, the ICICI Bank Limited. The contract of the writ petitioners come to an end on March 31, 2019. In the meantime, during the subsistence of the contract of the writ petitioners as Private Security Agencies, the Reserve Bank of India published a policy dated April 6, 2018, bearing Circular No.RBI/2017-18/152 DCM(Plg) No.3563/10.25.07/2017-18 prescribing certain eligibility criteria to be followed by all the banks and financial institutions while awarding contracts to the Private Security Services Agencies for cash transportation activities. The relevant eligibility criteria, by which the writ petitioners are aggrieved, states as follows:- "Standards for engaging the Service Provider and its sub-contractors A. Elegibility Criteria (1) Minimum net worth requirement of Rs.1 billion. The net worth of at least Rs.1 billion should be maintained at all times. [The net worth requirement will come into force with immediate effect for all future outstanding agreements of the banks. In case of existing agreements, the banks shall ensure that the net worth criteria is met as on March 31, 2019 (audited balance sheet to be submitted to the bank concerned by June 30, 2019) or at the time of renewal of agreement, whichever is earlier).'
(2.) It appears from the letter of the General Manager, Reserve Bank of India dated April 6, 2018 written to the Chairman/Managing Director/Chief Executive Officer, Public Sector Banks/Private Sector Banks/Foreign Banks/Regional Rural Banks/Primary(Urban) Co-operative Banks/State Co-operative Banks /District Central Co-operative Banks that the said criterion along with the other criteria have been prescribed in terms of paragraph-11 of the Statement on Developmental and Regulatory Policies dated April 5, 2018. According to the said letter, it was decided by the Reserve Bank of India that the banks should put in place certain minimum standards in their arrangements with the service providers for cash management related activities. However, in the said letter, it was also directed that as the cash held with the service providers and their sub-contractors continue to remain the property of the banks and the banks are liable for all associated risks, the banks should put in place appropriate Business Continuity Plan approved by their boards to deal with any related contingencies.
(3.) Paragraph-11 of the Statement on Developmental and Regulatory Policies dated April 5, 2018 states as follows:- "Norms for Cash-in-Transit (CIT)Industry and Promotion of SelfRegulatory Organisation by CIT Industry In the Statement of Developmental and Regulatory Policies of Februry 7, 2018, the Reserve Bank had announced a time frame to implement the recommendations of the two high level inter-agency committees constituted by it suggest measures for improvement of currency management, including security of movement of treasure. The Committee, inter alia, had recommended stipulation of minimum standards for cash logistics industry and promotion of a Self-Regulatory Organisation (SRO) for the industry. i) Under the 'Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services" issued by the Reserve Bank in November 2006, cash management and logistics at the bank level has largely been outsourced to Cash-in-Transit (CIT) companies an Cash Replenishment Agencies (CRAs). There is, however, no regulation or supervision for this industry at present. With a view to promote healthy growth of the sector and mitigate risks associated with movement of currency through these agencies, Reserve Bank will require the banks to ensure that the CIT companies/CRAs engaged by them meet minimum prescribed standards. The instructions to the banks in this regard will be issued within a month. ii) In order to ensure compliance with minimum standards for the CIT industry and other applicable laws, the Bank will encourage the cash management industry to promote a Self-Regulatory Organisation (SRO) for undertaking development work along with self-regulation of the industry, till such time that an appropriate lgislative structure is put in place.";

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