New Deposit Scheme Allows Old Notes Worth 5,000-Plus Only Once Till December 30

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New Deposit Scheme Allows Old Notes Worth 5,000-Plus Only Once Till December 30

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The government's new deposit scheme allows old notes worth more than 5,000 once till December 30

New Delhi:  The government has in new restrictions said that deposits of more than 5,000 rupees in old 500 and 1,000-rupee notes can be made in a bank account only once from today till December 30, the deadline for depositing old notes. The Finance Ministry said any deposit of over Rs 5,000 will be subject to questioning by two bank officials, who have to be given a "satisfactory explanation" on why the old notes were not deposited earlier. The government has said the explanation should be kept on-record in case of scrutiny at a later stage.
Here are the top 10 developments in the story:
  1. The Finance Ministry said in a statement today that since it is five weeks since the ban on 500 and 1,000-rupee notes was announced, it expects most people to have deposited the old notes that they had by now. "Keeping this in view and to reduce the queues in the banks, it has now been decided that amounts exceeding Rs 5,000 in old notes can be deposited only once between now and 30th December, 2016," it said.
  2. "The banks have been advised to conduct due diligence regarding the reasons for not depositing these notes earlier," the Ministry said. The government said, "Amounts of Rs 5,000 or less may continue to be deposited with banks in the customer's account, at present. However, cumulative deposits exceeding Rs 5,000 between 19th and 30th December, 2016" will be questioned.
  3. "Everyone is advised to deposit old Rs 500, 1,000 notes in one go. Restrictions notified to discourage people going everyday to banks," Finance Minister Arun Jaitley was quoted as saying by Press Trust of India.
  4. Under an ongoing scheme announced by the government earlier, the public are allowed to deposit up to a total of Rs 2.5 lakh rupees of old currency notes with banks till December 30 without scrutiny. Customers with amounts above that level have to provide an identification number known as the permanent account number or PAN.
  5. Government sources said the new guidelines have been issued as all exemptions on use of 500 and 1,000-rupee notes are now over. The use of the banned notes at petrol pumps and some government utilities ended on December 15.
  6. The RBI has said that more than Rs 5,000 in old notes will be credited only in bank accounts that are KYC compliant - KYC or Know Your Customer is a process by which banks get information about the identity and addresses of clients.
  7. The new restrictions are aimed at checking attempts to launder black or undeclared money by making large deposits into bank accounts as the deadline for deposits nears. With only 11 days to go, the new restrictions will allow only limited deposits and will also allow close scrutiny of the money deposited.
  8. Since demonetisation was announced on November 8, a number of fake accounts with large deposits of old notes in banks have been unearthed by investigators.
  9. The government has given people holding black money one chance to come clean by declaring their old notes and paying 50 per cent in tax and penalty under what the government calls the Pradhan Mantri Garib Kalyan Yojana 2016.
  10. Prime Minister Narendra Modi had on November 8 suddenly abolished Rs 500 and 1,000-rupee notes to combat corruption and black money. The ban took out 86 per cent of the money in circulation or 15.44 lakh crores. Almost 13 lakh crores in old notes has returned into the system.

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