RBI imposes more restrictions on deposit of old notes

Chennai: The RBI on Monday restricted deposits of demonetised Rs 500 and Rs 1,000 notes in excess of Rs 5,000 only once till December 30 — after strict scrutiny.

The new restrictions are meant to encourage deposits of demonetised currency notes under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.

In its notification, the Reserve Bank of India instructed all the banks to give full credit to demonetised notes over Rs 5,000 only in the case of accounts compliant with `Know Your Customer’ (KYC) norms.

If the accounts are not KYC compliant, then the credit for deposits of demonetised currencies will be restricted to Rs 50,000.

According to RBI, when a person deposits over Rs 5,000 in withdrawn currencies, then credit shall be given to that person’s account only after questioning him or her, in the presence of two bank officials, as to why the notes were not deposited earlier.

Only after getting a satisfactory explanation credit would be given. The bankers will keep the explanatory statement on record for future audit trail.

“An appropriate flag also should be raised in CBS (Core Banking Solutions) to that effect so that no more tenders are allowed,” RBI said.

The government demonetised Rs 500 and Rs 1,000 notes on November 8, saying the move was meant to fight corruption, black money and terror funding.

Deposits of Rs 500 and Rs 1,000 notes up to Rs 5,000 in value received across the counter will be allowed to be credited to bank accounts in the normal course until December 30.

However, if the deposits are less than Rs 5,000 at a time but cumulatively the value exceeds Rs 5,000, then the bank officials have to follow the procedure of getting on record the explanation from the depositor why the deposit was not made earlier.

The above restrictions shall not apply to tenders of demonetised currency for the purpose of deposits under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.

The equivalent value of demonetised notes tendered may be credited to an account maintained by the depositor at any bank in accordance with standard banking procedure and on production of valid proof of identity.

In case of deposits into third party accounts, banks can give credit provided there is specific authorisation given by the account holder to be presented to the bank and a valid identity proof of the depositor.