Faced with severe criticism from across the country, the Reserve Bank of India (RBI) on Wednesday partially reversed its controversial circular issued on December 19 that restricted deposit of demonetised notes over Rs5,000 only once till December 30 with proper explanation for delay in depositing it earlier. The RBI has made it clear that no questions will be asked either in case of one-time or repeat deposits by Know-Your-Customer (KYC) compliant account holders, who can deposit any amount any number of times. However, the relaxation will not apply to non-KYC customers, who have to give written explanation for delay in depositing the cash earlier. Also such account holders can deposit maximum Rs50,000 in a month.
The RBI had on Wednesday said, “It may also be ensured that full value of tenders of specified bank notes (SBNs) in excess of Rs5,000 shall be credited to only KYC compliant accounts and if the accounts are not KYC compliant credits may be restricted up to Rs50,000 subject to the conditions governing the conduct of such accounts.”
Though the Wednesday’s RBI notification gave a big relief to the people of the country, the decision triggered by widespread criticism against its earlier directive that required anyone who wanted to deposit over Rs5,000 in old currency to face questions by two bank officials on why he/she didn’t do it earlier.
The RBI notification came after Finance Minister Arun Jaitley’s assurance on Monday night and Tuesday morning that no questions will be asked to customers who deposit above Rs5,000 once failed to persuade bank officials who insisted that there should be fresh circular from RBI.
Reviewing the guidelines, the central bank decided to modify the old currency deposit rules for fully-KYC compliant customers, according to the RBI notification issued on Wednesday.
Following the order issued by the RBI, banks all over the country soon reportedly began accepting the junked Rs500/1,000 notes in KYC-compliant accounts without any questions.
With hardly 9 days to go before the deadline ends for depositing the scrapped notes, banks continued to witness rush with tempers flaring occasionally as the RBI notification came during the banking hours, not before the start of the day.
Meanwhile, members of All India Bank Officers’ Confederation (AIBOC) on Wednesday held demonstrations at various RBI offices, including Mint Road headquarters in Mumbai, demanding adequate cash availability to banks and complete withdrawal of deposit cap rules. Besides Delhi, demonstrations were held at various offices of RBI, including its head offices in Kolkata, Chennai, Bengaluru and Jaipur.
In a move to calm down the bankers’ community, the RBI on Wednesday also immediately responded saying that banks have issued currency worth over Rs5.92 lakh crore to the public since the demonetisation of old high value notes last month.
“The central bank has issued 2.2 billion (220 crore) pieces of notes of new Rs500 and Rs2,000 during the period — November 10 to December 19,” the RBI said in its notification.
On the contrary, the currency infused into the system, however, is much less than what has been deposited in the form of defunct notes.
The old Rs 500 and Rs 1,000 notes returned to the RBI and currency chests amounted to Rs 12.44 lakh crore as on December 10.
“Over the period from November 10, 2016 up to December 19, 2016, banks have reported that banknotes worth Rs 5,92,613 crore have been issued to public either over the counter or through ATMs,” the RBI said.
Banks were closed on November 9, the day demonetisation came into effect. The over 2.20 lakh ATMs too remained non-functional. However, the RBI said, “The central bank has issued to the banks and their branches, for distribution to the public, a total of 22.6 billion pieces of notes of various denominations. Of these 20.4 billion pieces belonged to small denominations of Rs 10, Rs 20, Rs 50 and Rs 100, while 2.2 billion belonged to higher denominations of Rs 2000 and Rs 500,” it added.