Faced with a public outcry, the Reserve Bank of India on Wednesday amended its latest notification that placed restrictions on depositing the scrapped ₹500 and ₹1,000 notes.

It said the restrictions are not applicable if the accounts fully adhere to Know-Your-Customer (KYC) norms.

On December 19, the RBI issued a notification limiting deposits of over ₹5,000 in the scrapped notes to one time, and that too after two bank officials quiz the depositor on why it was not done earlier.

Following the modification, bankers said that the one-time deposit cap up to December 30 has been done away with and the depositor will no longer be questioned if his/her account is KYC compliant.

According to bankers, most of the deposit accounts are KYC-compliant. However, they could raise a red flag if cash deposits are attempted to be made into inoperative accounts and children’s accounts.

To avoid rush A public sector bank official said: “Many customers wanted to avoid queues at branches. Hence, they postponed depositing the cash. Moreover, the Prime Minister had, on November 8, assured the public that they will have 50 days to deposit their notes and there is no need for panic.”

Opposition parties have been strident in their criticism of the RBI’s December 19 notification.

Arundhati Bhattacharya, Chairman, State Bank of India, said: “There is no confusion (regarding the circular), but you have to understand that we have to get certain IT in place in order to reflect these transactions to people. Our counter staff have to serve customers who are waiting in a queue. At that point, if you get a deposit, you can’t be calculating to see whether the person has crossed his limit.

“So, it is important for the system to say that this is one person who seems to have deposited so much, so you need to get a declaration as to how the amount has come into that person’s custody. The IT developments are taking a little time, it cannot be done overnight.”

Related Topics
comment COMMENT NOW