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  4. RBI rolls back restrictions on deposit of over Rs 5000 for KYC-compliant accounts

RBI rolls back restrictions on deposit of over Rs 5000 for KYC-compliant accounts

Two days after imposing restrictions on deposit of demonetised currency notes in banks, the Reserve Bank of India today rolled bank the provision for accounts that are compliant with the KYC norms. According to a

India TV Business Desk India TV Business Desk
New Delhi Updated on: December 21, 2016 14:35 IST
RBI withdraws restriction on deposits
RBI withdraws restriction on deposits

Two days after imposing restrictions on deposit of over Rs 5000 in demonetised currency notes in banks, the Reserve Bank of India today withdrew the provision for accounts that are compliant with the KYC norms.

According to a notification issued by the central bank today, the provision barring people from depositing over Rs 5000 in demonetised currency for more than once in banks will not apply to KYC complaint accounts.

In effect, it means that the individuals seeking to deposit over Rs 5,000 will not be questioned by the bank officials.

The central bank and the government have been facing flak for its latest rule that provided for questioning of depositors by bank officials for making deposits of over Rs 5000 even in one go and also for the unexpected restriction 10 days ahead of the December 30 deadline set earlier by the government.

With 10 days left for the Dec 30 deadline of exchanging old Rs 500 and Rs 1000 notes, the RBI puzzled citizens with its provision that restricted deposit od over rs 5000 for more than once.

The move invited criticism from various quarters with opposition charging the government of “breaking PM”s promise of Nov 8 and FM”s assurance of November 11."

Congress vice-president Rahul Gandhi also criticised RBI”s Monday order, saying “RBI is changing rules like the PM changes his clothes.”

Chidambaram described the RBI order as a desperate attempt, terming the move as a “desperate government resorting to desperate measures.”

Jaitley tried to clarify that there is no limit on any person depositing any amount in the old currency, but not repeatedly.

He said anyone going to bank more than once to deposit money “raises suspicion.” It, however, didn’t answer the question most people are asking.

Individuals visiting banks to deposit demonetised currency were however sought explanation at some banks despite the FM's promise of no questioning if the entire amount is deposited in one go.

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