RBI goes back on Rs 5000 deposit limit, says restriction not applicable for KYC compliant accounts
The Reserve Bank of India on Wednesday went back on its earlier announcement limiting the number of deposits over Rs 5000 in demonetized currency, and said that the restriction will no longer be applicable on KYC compliant bank accounts.
Since the demontisation of Rs 500 and Rs 1000 notes on December 9, the government had placed a series of limitations on the withdrawal of money from banks and ATMs.
However on December 19, the RBI placed the first restriction on cash deposits and issued a notification instructing banks to allow account holders to deposit just one payment of over Rs 5000 before December 30.
The official notification read, “Tenders of SBNs (Specified Bank Notes) in excess of ₹ 5000 into a bank account will be received for credit only once during the remaining period till December 30, 2016. The credit in such cases shall be afforded only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage.”
“Tenders of SBNs up to ₹ 5000 in value received across the counter will allowed to be credited to bank accounts in the normal course until December 30, 2016. Even when tenders smaller than ₹ 5000 are made in an account and such tenders taken together on cumulative basis exceed ₹ 5000 they may be subject to the procedure to be followed in case of tenders above ₹ 5000, with no more tenders being allowed thereafter until December 30, 2016,” it said.
The decision to limit the number of deposits was critisized by many since it was made just days before the deadline.
Moreover, both Finance Minister Arun Jaitley and Prime Minister Narendra Modi had earlier assured people that they would have ‘complete flexibility’ while making deposits till December 30.
Taking cognisance of the opposition, the RBI issued another notification stating that the aforementioned provision would no longer apply to KYC (Know Your Customer) compliant account holders, and instructing banks to continue accepting multiple deposits of over Rs 5000.
KYC is a process by which banks get information about the account holder’s identity and address. For non-KYC bank accounts, the limit of one deposit of over Rs 5000 is still applicable.
The restrictions, as stated earlier, will not be applicable on deposits made towards the new black money disclosure scheme under the Pradhan Mantri Garib Kalyan Yojana, 2016.