Govt tightens norms for deposit of old notes

After banning old 500 and 1,000 rupee notes on November 8, the government had allowed all of the cash holdings with any person to be deposited in bank accounts till December 30.

There was no limit on the quantity or value of the junked notes that could be deposited.

However, the government on December 17 issued a gazette notification putting restrictions on deposits henceforth.

"The deposits of old notes of Rs 500 and Rs 1,000 denominations have been reviewed by the government from time to time. Already more than five weeks have elapsed since the time of the announcement of the cancellation of the legal tender character of these notes. It is expected that, by now, most of the people would have deposited such old notes in their possession," an official statement said.

With a view to "reduce the queues in the banks", the government said it has now been decided that "amounts exceeding Rs 5,000 in old notes can be deposited only once between now and December 30, 2016." 

"The banks have been advised to conduct due diligence regarding the reasons for not depositing these notes earlier," the statement said.

Amounts of Rs 5,000 or less may continue to be deposited with banks in the customer's account, as at present.

"However, cumulative deposits exceeding Rs 5,000 between December 19 and December 30, 2016 will be as per the procedures advised by the RBI in respect of deposits exceeding Rs 5,000," it said.

The Reserve Bank of India (RBI) too came out with deposit guideline stipulating that restrictive conditions will also apply on the cumulative deposit of such notes in a single account when it exceeds Rs 5,000.

However, the defunct currency up to any amount can be deposited under the new black money amnesty scheme, PMGKY.

Also, the government said a separate notification has been issued allowing District Cooperative Central Banks (DCCBs) to deposit the old notes they collected between November 10 and 14.

"NABARD, which supervises the DCCBs, will conduct complete audit check of the Know Your Customer (KYC) documents of the individual customers who have deposited these notes or of the members of the Primary Agricultural Credit Society (PACS) who have deposited these notes," the statement said.