Introduction
The LGBTQ+ movement in India has gained a strong foothold in the country for almost a decade now. However, the defining moment for the movement came on September 6, 2018, when the Supreme Court of India stated a landmark judgment against Section 377 of IPC. Since then the LGBTQ+ community has moved forward on the bumpy path towards their rights, seldom looking back. India has witnessed progressive reforms and policy amendments, gradually breaking down barriers of discrimination and these changes are slowly crafting a more inclusive society.
A Look Back: The Decriminalization of Section 377
The Supreme Court’s decision in 2018 is considered a milestone and oftentimes historic for the LGBTQ+ community in India. The judgment struck down the section 377 of IPC. This archaic law which dates back to the colonial era had criminalized consensual same-sex relationships. This subjected the members of the LGBTQ+ community to widespread discrimination, harassment, and social stigma. This law continued to be followed even after independence until the Supreme Court in the landmark case of Navtej Singh Johar v. Union of India “read down” Section 377 and decriminalized consensual same-sex relationships.
Beyond Decriminalization: Expanding Rights and Recognition
Decriminalization has never been the end goal for the LGBTQ+ community. Yes, it has made same-sex relationships valid in the eyes of the law, but it is just the initiation in a very long-drawn process to give equal rights to queer individuals which are leisurely enjoyed by an average citizen. For centuries queer community has been seen not as part of society, as a whole. Draconian laws and social stigmas limited the queer community to enjoy equal rights as any average person.
But recently the LGBTQ+ community has been able to get a few of their long-due rights which can be counted as a small step on the big path forward.
Financial inclusion: RBI “clarification” on Joint Bank Accounts
In 2022 Kerala High Court ruling marked a significant step forward in the recognition of same-sex relationships in India. While not directly addressing the legality of same-sex marriage, the court’s decision to recognize a lesbian couple as a “family” to open a joint bank account sent ripples through the socio-legal landscape.
In a significant move, the Reserve Bank of India (RBI) recently clarified that same-sex couples are eligible to open joint bank accounts. A similar position is taken by the Ministry of Finance wherein a “ clarification” notification dated 28th August 2024 stated thus “This is to clarify that there are no restrictions for persons of the Queer Community to open a joint bank account and also nominate a person in a queer relationship as a nominee to receive the balance in the account, in the event of death of the account holder.” The financial authorities have issued these notifications in connection with the Supreme Court judgment on Supriya Chakraborty & Anr. v Union of India
Some Indian Insurance Companies, both public and private, in 2021 and 2022 have begun to offer health insurance policies to the LGBTQ+ community, including same-sex partners.. This move is an aftereffect to inclusive insurance policies directed by the Insurance Regulatory and Development Authority of India (IRDAI). This development has allowed the queer population to attain health insurance for themselves and their partners, as they join the economic and social mainstream. The effects of these developments are multifaceted. They result in the increase of financial inclusion by allowing LGBTQ+ individuals to access joint bank accounts and insurance policies, thereby drastically improving their financial security. These measures also contribute to the normalization and acceptance of same-sex relationships in society and create legal precedents for future reforms. Additionally, the inclusion of LGBTQ+ individuals in the financial mainstream can potentially contribute to economic growth and development.
“While the move towards financial inclusion for LGBTQ+ individuals is commendable, the lack of overarching legislation leaves these advancements vulnerable to policy reversals and inconsistent implementation” Critically analysing these developments, it’s evident that while commendable, they represent a piecemeal and slow approach to LGBTQ+ rights. The lack of comprehensive legislation tends to leave these advancements vulnerable to inconsistent implementation and potential reversal. The judiciary and administrative bodies have taken progressive steps, but the legislature needs to play a more active role in enshrining these rights in law. The financial sector’s initiatives, while positive, highlight the broader societal and legal challenges faced by the LGBTQ+ community. True equality requires a holistic and inclusive approach that addresses all aspects of life.
It must be understood that financial rights for same-sex couples are one of the main issues of the Queer movement. The financial rights enjoyed by same-sex couples were heavily limited. So, even if the Supreme Court did not legalize Queer marriage, it upheld financial rights for same-sex couples. The RBI’s clarification on joint bank accounts for same-sex couples and the introduction of inclusive insurance policies are positive steps, but they represent only the beginning of necessary financial reforms.
Moving forward and key priorities
Financial Inclusion:
The way forward for financial inclusion of the LGBTQ+ community in India requires a comprehensive and multi-faceted approach that addresses various aspects of the financial sector and involves multiple stakeholders. A robust legislative framework is crucial, including the enactment of comprehensive legislation that explicitly recognizes LGBTQ+ rights in financial matters and amends existing financial laws to include non-discrimination clauses based on sexual orientation and gender identity. This should be complemented by regulatory reforms, with the Reserve Bank of India (RBI) and other financial regulators issuing detailed guidelines on LGBTQ+ inclusion in all financial services. For instance, the RBI’s recent clarification on joint bank accounts for same-sex couples is a step in the right direction, but more comprehensive guidelines are needed across all financial products and services.
Legalizing Same-Sex Marriage
The Supreme Court in a 3:2 verdict did not legalize same-sex marriage. Justice S.R. Bhat and Justice Hima Kohli stated that “The Court may feel that that measure or norm is lacking, but cannot venture into the legislative domain.” This was supported by the CJI who himself stated “The state must recognize queer relationships. The freedom to choose a partner would be rendered “otiose” if the state does not recognize the “bouquet of entitlements.” Thus the judiciary is not the right avenue to achieving same-sex marriage. It is the legislature that must come forward to provide the right to marry for same-sex couples. This aligns with global trends where legislative bodies have been instrumental in legalizing same-sex marriage and consequently enhancing financial rights for LGBTQ+ individuals. While the judiciary may not be the avenue for achieving same-sex marriage, its recognition of the need for the state to acknowledge queer relationships provides a strong foundation for advocacy and potential legislative action. Granting legal recognition to same-sex marriages is of utmost importance as it would provide LGBTQ+ couples with the same rights and protections as heterosexual couples. The legalization of queer marriage would have far-reaching implications for financial inclusion, including inheritance rights, tax benefits, insurance and health benefits, property rights, pension and social security benefits, credit assessments, and banking services.
Strengthening Anti-Discrimination Laws
Even after half a decade of the decriminalization of LGBTQ+ relationships, these discriminatory practices, both overt and covert, have far-reaching economic consequences for LGBTQ+ individuals. In the case of employment, many face workplace discrimination that can lead to lower incomes, job insecurity, and limited career advancement opportunities, directly impacting their financial stability. Housing discrimination can force LGBTQ+ individuals to pay higher rents or live in less desirable areas, affecting their ability to build wealth through property ownership. In healthcare, discrimination can result in higher out-of-pocket expenses and inadequate insurance coverage, potentially leading to financial strain. Furthermore, family rejection or lack of legal recognition for same-sex partnerships can exclude LGBTQ+ individuals from familial financial support systems and inheritance rights. Comprehensive anti-discrimination laws are needed to protect LGBTQ+ individuals from discrimination in all areas of life, including housing, employment, healthcare, and in most cases family. Thus the a need to make new and strengthen the existing Anti-Discrimination laws which not only include overt discrimination but must also address covert discrimination.
Conclusion
India has made some good progress for LGBTQ+ people since Section 377 was changed. Now, they can open joint bank accounts and even adopt children individually. While the recent clarifications and notifications from financial regulators mark a positive start, they should be viewed as stepping stones towards a more comprehensive goal. The path forward requires concerted efforts from policymakers, financial institutions, educators, and civil society organizations. By combining policy reforms, education, product innovation, and diligent monitoring, India can create a financial ecosystem that not only includes but truly empowers its LGBTQ+ citizens. This journey towards financial inclusion is an essential component of India’s broader commitment to equality and social justice, and its success will be a significant milestone in the country’s social and economic development. As India progresses on this path, it has the potential to set new standards for LGBTQ+ financial inclusion in the global south, contributing to a more equitable and prosperous society for all its citizens.
Author(s) Name: Ayush Mondal (Department of Law, Calcutta University)
