Economy

RBI sets one-time limit for big deposits of old notes

A person fills up a challan to deposit cash in his postal savings account at the Vellore Head Post Office in Tamil Nadu on November 11, 2016. Photo: C. Venkatachalapathy

A person fills up a challan to deposit cash in his postal savings account at the Vellore Head Post Office in Tamil Nadu on November 11, 2016. Photo: C. Venkatachalapathy

Eleven days before the window to deposit the withdrawn Rs. 500 and Rs. 1,000 currency notes is to close, the Reserve Bank of India (RBI) has placed restrictions on deposits exceeding Rs. 5,000, using these notes.

 

 

In a circular issued on Monday, the central bank said that individuals can deposit the old Rs. 500 and Rs. 1,000 denomination currency notes, totalling more than Rs. 5,000 only once till December 30 and that too, if they provided satisfactory reasons as to why these deposits had not been made earlier. “Tenders of specified bank notes (SBN) in excess of Rs. 5,000 into a bank account will be received for credit only once during the remaining period till December 30, 2016,” according to the circular.

 

“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,” it said.

 

 

Explanation on record

 

The RBI said the explanation provided by the depositor should be kept on record to facilitate an audit trail at a later stage. Banks have been asked to flag the deposits in their systems so that no more deposits were allowed for that account.

 

When the demonetisation drive started in early November, the RBI had not placed a bar on the number and value of deposits.

 

According to the latest RBI data, Rs. 12.44 lakh crore of old notes had been deposited back into the banking system, as of December 10. The total value of the old Rs. 500 and Rs. 1,000 currency notes in circulation, as on November 8, was Rs. 15.44 lakh crore.

Even if the value of a single deposit totalled less than Rs. 5,000, and the tenderer had cumulatively exceeded Rs. 5,000 in multiple deposits, they would be subjected to the same procedure, the RBI said.

 

The banking regulator has also clarified that for accounts that are not fully KYC-compliant, the value of deposits using such notes would be restricted to Rs. 50,000.

 

“It may also be ensured that full value of tenders of SBNs in excess of Rs. 5,000 shall be credited to only KYC-compliant accounts and if the accounts are not KYC-compliant, credits may be restricted up to Rs. 50,000 subject to the conditions governing the conduct of such accounts,” the RBI said.

 

The Central bank clarified that though restrictions had been placed on deposits of SBNs, they were not applicable to contributions under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.


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Printable version | Aug 13, 2022 12:39:44 am | https://www.thehindu.com/business/Economy/RBI-sets-one-time-limit-for-big-deposits-of-old-notes/article16904722.ece