The Supreme Court has said that the government's recently-introduced reforms in retail lack legal sanction. The court has given the government till November 5 to amend the existing rules of the Reserve Bank of India to allow the implementation of the new policy. The court made it clear that it's asking for processes to be followed, and is not challenging the new rules; it also refused to suspend the new reforms till the technicality is sorted out.In September, the government introduced new laws that allow upto 51% Foreign Direct Investment or FDI in multi-brand retail, opening the doors of the country's vast retail sector to international super-chains like Wal-Mart. The Congress' main ally in the coalition government at the Centre, Mamata Banerjee, quit the government over this decision, reducing it to a minority.A Public Interest Litigation (PIL), filed by Supreme Court advocate ML Sharma, had accused the government of not following the required process in introducing its new policy. The Attorney General, GE Vahanvati, accepted that the steps for amending regulations had not been followed.The government used an executive order for its reform in retail - the new policy did not have to be voted on by Parliament. Most parties, including some in the UPA, have opposed it.The government has also recently cleared upto 49% FDI in pension and insurance sectors, but these proposals have to be cleared by Parliament.

The court said, "...This is a must before the policy is given a legal shape. RBI regulations haven't been amended which is necessary. We want to know when it will be amended?"