Customers may now deposit Rs. 5, 000 plus in old notes – RBI’s U – turn

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From the time, demonetisation has been announced, there has been a speculation of all sorts. Hence, to clear the air once more, we have brought to you the latest updates on demonetisation related news. Well, as a matter of fact, RBI or the Reserve Bank of India, has recently issued fresh notification that the restriction of depositing Rs. 5, 000 old notes has now been withdrawn.

Central Bank’s notice

As a matter of fact, this restriction shall be withdrawn on those KYC – compliant account holders. Well, this new notification has come following what the Central Bank had informed about 2 days ago. And as per the Central Bank’s notification, an individual would be able to deposit more than Rs. 5, 000 only once that too till the 30th of December, 2016.

The bank notes deposited in the bank can be in old currency. However, when depositing the money, it has to be explained very clearly as to why the amount has not been deposited till now. But, after reviewing the notification issued by the Central Bank on the 19th of December, 2016, it had advised all the banks to withdraw both the above stated conditions for that of the fully KYC – compliant accounts.

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Announcement of demonetisation & the rules

When the Government of India had announced the ban of the old high denomination notes in the Rs. 500 & Rs. 1, 000 bank notes respectively, on the 8th of November, 2016; it had also stated that people who had cash in any of the denominations could deposit the amount in their bank accounts till the 30th of December, 2016. And depositing of these – Rs. 1, 000 as well as Rs. 500 had no limit as such.

But again on the 17th of December, 2016, the government had issued one more gazette notification which stated these restrictions to be implemented on all the deposits. In addition to this, it was on 19th December, 2016, that the Central Bank had very clearly stated that these now banned old high denomination notes can be deposited to KYC – compliant accounts if the amount to be deposited exceeds Rs. 5, 000 limit.

While on the other hand, credit shall be restricted to only Rs. 50, 000 if the accounts do not happen to be KYC – compliant. And if such is a case then as per RBI’s instructions, the equivalent value of that of the specified bank notes tendered can to a certain extent be credited to another 3rd party account. This can only be possible with proper authorisation in place apart from the procedures being followed like that of the valid identity proof & the likes.

Finance Ministry’s notification

As per a notification issued by the Finance Ministry, under the Taxation & Investment Regime for the Pradhan Mantri Garib Kalyan Yojana of 2016, there is no limit to either the quantity or the value of specified bank notes which are tendered for either payment or to be deposited or both.

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