Jaitley Contradicts RBI’s Notification – Says Deposit any amount of banned notes in one go.

Jaitley Contradicts RBI’s Notification – Says Deposit any amount of banned notes in one go.

After tightening rules for depositing old Rs 500 and Rs 1,000 notes, finance minister Arun Jaitley on Monday night said no questions will be asked if any amount of junked currency is deposited in one go but repeated deposits may raise queries, the PTI reported.

Jaitley’s comment is a clear contradiction to the RBI’s (Reserve Bank of India)  notification in the morning, which said customers depositing more than Rs 5,000 will have to satisfactorily explain why they did not do so early on, even if it is just once.

With nearly Rs 13 lakh crore out of the Rs 15.4 lakh crore worth of Rs 500 and Rs 1,000 junked already deposited in banks, the government has changed rules to mandate that individuals can deposit over Rs 5,000 in old currency bills only once until December 30 and that too after explaining why it had not been done so far.

Explaining the rationale behind the move, Jaitley said all exemptions to certain sectors and utilities, which had been allowed to accept the banned currency post demonetisation, ended last week and all those in possession of the old notes are supposed to deposit them with banks.

“Anyone who has old currency notes is not allowed to trade in them. He can only go and deposit them with banks,” he said.

With a view to curtail queues at banks, holders are encouraged to deposit the entire holding in one go, rather than going repeatedly, he added.

“If they go and deposit with bank any amount of currency no questions are going to be asked to them and therefore the Rs 5,000 limit does not apply to them if they go and deposit it once.

“But if they are going to go everyday and deposit some currency, same person, that gives rise to suspicion that where is he acquiring this currency from. In that event a person may have something to worry about. Therefore everyone is advised whatever old currency you have please go and deposit it now,” he said.

However, the morning notification from the RBI had said that the those customers depositing more than Rs 5,000 will have to face the questioning by the bank officials.

“Tenders of SBNs in excess 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 afforded only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage. An appropriate flag also should be raised in CBS to that effect so that no more tenders are allowed,” the RBI notification said.

The latest statement by the finance minister will only add to the confusion of the worried customers, who have already started queuing up in front of the banks to deposit their old notes. Many of them could have waited patiently for the rush at banks to decline to deposit their cash as the government had time and again promised that the deadline for depositing any amount is 30 December.

However, Jaitley justified the move to restrict the deposits saying there is no scope now for earning any old currency because all exemptions have been waived and it makes sense to go deposit all the holding in one go, Jaitley said. “This is the objective of the order passed today (on Monday).”

Input from PTI