Thursday , March 21 2019

Finance Minister stated no questioning on deposits at one go, but some banks prefer to do so


NEW DELHI: Finance Minister Arun Jaitley stated on December 19 no queries would be asked if any amount of demonetized currency is deposited at one go but repetitive deposits might raise queries.

Yet, depositors are being subjected to a genuine inquisition at some banks.

Everyone who wants to deposit more than Rs 5,000 in demonetized notes in a bank account must fill in a form that asks the depositor 2 questions—why the amount could not be deposited earlier, and what is your source of funds? This form-filling process is a precondition we found by personally visiting a bank.

As per the RBI notification issued yesterday, the depositor must answer these questions in the presence of at least 2 bank officials. The money will be credited in the account only if the officials find the answers to be satisfactory.

The sudden tightening of functioning procedures comes along with the RBI’s December 19 guideline that scrapped currency notes above Rs 5,000 in worth could be deposited in banks till December 30 only at one go.

The form also requests the depositor to sign a declaration stating, “I understand that the SBN’s [specified bank notes; the scrapped currency that is] up to Rs 5,000 in value deposited through the counter will be allowed until December 30.”

The new form is the result of the RBI’s December 19 announcement which stated, “Tenders of SBNs in extra of Rs 5,000 into a bank account will be received for credit only once during the remaining period till December 30, 2016. The credit in such cases shall be have the funds for only after questioning tenderer, on record, in the existence of at least 2 officials of the bank, as to why this could not be deposited earlier and receiving a pleasing explanation. The explanation should be kept on record to enable an audit trail at a later stage.”

The RBI had stated deposits up to Rs. 5,000 in scrapped currency across the counter would be credited to bank accounts in the normal course until December 30, 2016. Even when deposits smaller than Rs. 5,000 are made in an account and taken together on accumulative basis exceed Rs 5,000 they might be subject to the procedure to be followed in case of bids above Rs 5,000, with no more tenders being allowed subsequently until December 30.

So opposing to statement made by government yesterday that no queries will be asked if one deposits old currency worth more than Rs 5000 at one go, we initiate that queries stated above, and shown in the image below


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