Judicial review of central banks: an Indian perspective

ABSTRACT Central banks are unique institutions of profound economic significance. Judicial review of central bank actions raises concerns regarding the appropriate zone of judicial deference. Over the last decade, the frequency of judicial review challenges before the Supreme Court of India involving the Reserve Bank of India (“RBI”) appears to have substantially increased. I attempt to contextualize this trend against the evolving nature of judicial deference towards the RBI. From 1960s to late 1990s, the Court was extremely deferential towards the RBI. With the turn of the century, several exogenous factors compelled the RBI to act beyond its uncontested traditional functions, affecting stakeholders beyond its immediate jurisdiction. This explains the increase in judicial review challenges involving the RBI since 2015. This trend also provides evidence of the eroding judicial deference towards the Central Bank at least on the regulatory (process) aspects, if not as much on the substantive economic policies themselves.