In a U-turn, the RBI on Wednesday withdrew its order barring people with KYC-compliant bank accounts from depositing over Rs 5,000 in old currency more than once until December 30.
But the notification stands for bank accounts which are non-KYC. The upper limit of Rs 50,000 also stays for non-KYC bank accounts, the Reserve Bank of India said.
The central bank said that on reviewing its December 19 notification, it was advising banks to withdraw the one-time deposit condition for amounts above Rs 5,000 for fully KYC-compliant accounts.
On December 19, the RBI had announced that deposits of demonetised Rs 500 and Rs 1,000 notes in excess of Rs 5,000 will be allowed only once till December 30 — that too after strict scrutiny.
The decision created massive confusion even after Finance Minister Arun Jaitley contradicted on Monday night the RBI notification, saying people will not be questioned if any amount of old currency was deposited at one go. But repeated deposits may invite scrutiny, he said.
The RBI decision on Wednesday came after the one-time deposit condition drew widespread flak.
Both the Opposition and bank customers hit out at the government’s flip-flop over deposit of old notes following the November 8 decision to recall the high-value currency bills.
According to the December 19 notification, if a person deposits more than Rs 5,000 in withdrawn currencies, the account will be credited only after questioning him or her, in the presence of two bank officials, as to why the money was not deposited earlier. The bankers were to keep the explanatory statement on record for future audit trail.
Even if the deposits were less than Rs 5,000 at a time but cumulatively exceeds the amount, then also the bank officials were told to get on record an explanation from the depositor. The condition vis-a-vis non-KYC compliant accounts remains, the upper limit of deposits restricted to Rs 50,000.
Officials said the curbs were meant to encourage deposits of the demonetised currency under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016. The Finance Ministry had also said earlier that the decision was meant to end the seemingly unending queues in banks.
Meanwhile, in order to encourage digital transactions, the Finance Ministry asked PSU banks to restrict fees on payments through IMPS and UPI to the extent that is applicable for NEFT fund transfer of over Rs 1,000.
As per RBI norms, NEFT transfers of up to Rs 10,000 attract Rs 2.5 fee. From Rs 10,000-1 lakh the fee is Rs 5; on Rs 1-2 lakh it is Rs 15, and beyond Rs 2 lakh it is Rs 25. Service tax is charged in addition to this.
For Unstructured Supplementary Service Data (USSD) transactions above Rs 1,000, the ministry said a further discount of 50 paise on these rates shall apply. USSD is mobile short code message and used mainly for banking services on feature phone. The USSD fee is Rs 1.50, which has been waived till December 30, 2016. In order to further promote digital and card payments, the ministry has issued a direction in public interest to all Public Sector Banks, said an official statement.
In accordance with this “these banks shall not charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above Rs 1000, with service tax being charged at actuals,” it said.
Because of the RBI’s frequent flip-flops, bank officials have become targets of anger and wrath of customers. In order to bring this to the forefront, members of All India Bank Officers’ Confederation (AIBOC) on Wednesday held demonstrations at various RBI offices, including Mint Road headquarters in Mumbai. They have demanded 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.
Pointing out that the banking system itself is losing credibility because of frequent changes in RBI/government policies, AIBOC general secretary Harvinder Singh said customer dissatisfaction is increasing because of chaos and confusion created in implementation of the scheme.
“Bank officers are being subjected to the anger, anguish and wrath of customers or general public due to short supply of currency notes to the banks, particularly to Public Sector banks,” it said.