Depositing Old Notes In Banks: Five Things To Know

RBI announced new restrictions to deposit old currency in bank accounts till December 30. As per the new norms, large deposits cannot be made multiple times in bank accounts.

The new notification regarding currency notes is aimed at checking large deposits undeclared money into bank accounts as the deadline for deposits nears.

Here are the major things from the latest circular of RBI you need to know about depositing old notes in bank accounts.

New deposit limits

Deposits of more than 5,000 rupees in old Rs 500 and 1,000 notes can be made in a bank account only once from now until December 30, which the last deadline for depositing old notes. Read Also: Indian Currency Demonetization: Advantages and Disadvantages

The depositor will be asked to explain reasons for depositing

The deposit in excess of Rs 5000 notes 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.

Large deposits can not be made

Even when notes smaller than Rs 5000 are made in an account and such notes were taken together on cumulative basis exceed Rs 5,000 they may be subject to scrutiny. Tenders of old notes up to Rs 5000 in value received across the counter will allow being credited to bank accounts in the normal course until December 30, 2016. Even when tenders smaller than Rs 5000 are made in an account and such tenders took together on cumulative basis exceed Rs 5000 they may be subject to the procedure to be followed in case of tenders above Rs 5000, with no more tenders being allowed thereafter until December 30, 2016.

KYC compliant accounts

Full value of notes in excess of Rs 5000 shall be credited to only KYC compliant accounts. If the accounts are not KYC compliant credits may be restricted up to Rs 50000 subject to the conditions governing the conduct of such accounts.

No restrictions for deposit of notes under PMGKY

The restrictions regarding the deposit of old notes shall not apply to tenders of old notes for the purpose of deposits under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016. The equivalent value of specified bank notes tendered may be credited to an account maintained by the tenderer at any bank in accordance with standard banking procedure and on production of valid proof of Identity

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