New Delhi, Dec 19, 2016: Deposits of above Rs 5,000 in banned banknotes can be made only once till December 30, the Reserve Bank of India (RBI) said on Monday, the latest in a series of banking restrictions after the government recalled high-value bills.
The RBI said such deposits will be accepted only after two bank officials have questioned customers and satisfied themselves on why they had not deposited the money earlier. The accounts must also be compliant with customer information details called KYC otherwise deposits can be restricted to Rs 50,000.
“The (depositor’s) explanation should be kept on record to facilitate an audit trail at a later stage,” the RBI notification said.
The government pulled out 500-and 1,000-rupee bills on November 8, in an effort to fight a parallel ‘black economy’, and has announced near-daily changes to banking rules to manage the transition. The banned notes can be deposited in banks till December 30 and thereafter at select RBI counters till March 31.
But the shock move has led to a severe cash crunch. Cash withdrawals from banks have been restricted at Rs 24,000 a week, although most banks are unable to provide even that. The government has said it will replenish most of the withdrawn cash – about 86% of the money in circulation -- with new 2000-and 500-rupee notes.
Monday’s changes also said even for deposits below Rs 5000, made in one go or cumulatively till December 30, customers could be questioned should the banks feel the need.
At the time of demonetisaing the high-value bills, the government had said people should not panic and crowd banks, and that they had enough time to deposit or exchange their money.
Monday’s decision is seen aimed at discouraging a late surge in deposits of unaccounted for money in regular bank accounts. The government has said it had come across instances of the corrupt using bank accounts of the poor to make deposits of banned notes.
The RBI notification said the new banking restrictions were placed to encourage people to make deposits under the Pradhan Mantri Garib Kalyan Yojana, 2016, a new window to declare unaccounted for wealth.