Account holders can deposit over Rs 5000 in old notes just once before Dec 30: RBI

Deposits of over Rs 5000 in demonetized notes of Rs 500 and Rs 1000 can only be made once till December 30, the Reserve Bank of India (RBI) said on Monday.

For example, if an individual has Rs 1 lakh in demonetized notes, he cannot make two deposits of Rs 50,000 from now. He will have to accumulate the cash and make a single deposit before December 30.

The government had demonetized Rs 500 and Rs 1000 notes on December 9, following which a series of limitations were placed on the withdrawal of money from banks and ATMs. However, this is the first restriction placed on cash deposits in bank accounts.

The new restriction might help the government to both limit and scrutinize each deposit as the deadline nears.

The RBI also said that deposits of over Rs 5000 will only be accepted after at least two bank officials have questioned the depositor are are satisfied with his or her explanation.

“The explanation should be kept on record to facilitate an audit trail at a later stage,” the RBI notification said, adding that deposits below Rs 5000 can also be scrutinized in the same way if necessary.

In addition, deposits exceeding Rs 5000 can only be credited only to KYC-compliant accounts. Know Your Customer (KYC) is a process by which banks get information about the account holder’s identity and address.

If the accounts are not compliant, only Rs 50,000 can be deposited.

The restrictions, however, will not be applicable on deposits made towards the new black money disclosure scheme under the Pradhan Mantri Garib Kalyan Yojana, 2016.