Govt. notifies that Old Currency Notes of Rs. 500 and Rs. 1000 can be deposited only once upto 30 Dec. 2016; No limit for deposit of old currency under the PMGKY
RBI has notified that now old Currency Notes of Rs. 500 and Rs. 1000 can be deposited only once upto 30 Dec. 2016. Besides there are another restriction on deposit of such notes of above Rs. 5000, except for fully compliance KYC accounts. It seems to be a step taken to encourage deposit of such money under the Taxation and Investment Regime for the PMGKY Scheme, 2016.
S.O. 4086(E).—In exercise of the powers conferred by sub-section (2) of section 26 of the Reserve Bank of India Act, 1934 (2 of 1934), the Central Government hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016, namely:—
In the said notification, in paragraph 2,—
(a) in clause (iii), the following provisos shall be inserted, namely:––
“Provided that the deposit upto the amount of Rs.5000/- shall be made directly into such account and the rest of the amount, if any, shall be subject to such conditions as the Reserve Bank of India may specify: Provided further that the deposit of an amount exceeding Rs.5000 shall be made only once per account until 30th December, 2016;”;
(b) after clause (iii), the following clause shall be inserted, namely:––
“(iiia) there shall not be any limit on the quantity or value of the specified bank notes that are tendered for payment and deposit made under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016;”;
(c) after clause (ix), the following clause shall be inserted, namely:––
“(x) deposit of specified bank notes collected between 10th day of November to 14th day of November, 2016, by the District Co-operative Central Bank shall be subject to instructions of the Reserve Bank of India and for the specified bank notes deposited by individual customers or by the Primary Agricultural Credit Societies complete audit check of the veracity of the Know Your Customer documents of the said individual or the members of the said Primary Agricultural Credit Societies shall be conducted by the National Bank for Agriculture and Rural Development:
Provided that the linked currency chest to District Co-operative Central Banks shall give the exchange value for verified specified bank notes only and subject to usual checks relating to identification of fake Indian currency notes.”.
Note : The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide notification number S.O. 3407(E), dated the 8th November, 2016 and subsequently corrected vide notification number S.O. 3418(E), dated the 9th November, 2016 and amended vide S.O. 3446(E), dated the 13th November, 2016, S.O. 3449(E), dated the 14th November, 2016, S.O. 3479(E), dated the 17th November, 2016, S.O. 3488(E), dated the 18th November, 2016, S.O. 3543(E), dated the 24th November, 2016 and S.O. 3599(E), dated the 30th November, 2016.
Withdrawal of Legal Tender Character of existing Rs. 500/- and Rs. 1000/- Bank Notes (Specified Bank Notes) – Deposit of Specified Bank Notes (SBNs) into bank accounts
Please refer to Circular DCM (Plg) No.1226/10.27.00/2016-17 dated November 08, 2016 on the captioned subject. On a review of the provisions ii, iii and iv at C of Para 3 dealing with credit of the value of SBNs into bank accounts it has been decided to place certain restrictions on deposits of SBNs into bank accounts while encouraging the deposits of the same under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016 as indicated below:
i) Tenders of SBNs in excess of ₹ 5000 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.
ii) Tenders of SBNs up to ₹ 5000 in value received across the counter will allowed to be credited to bank accounts in the normal course until December 30, 2016. Even when tenders smaller than ₹ 5000 are made in an account and such tenders taken together on cumulative basis exceed ₹ 5000 they may be subject to the procedure to be followed in case of tenders above ₹ 5000, with no more tenders being allowed thereafter until December 30, 2016.
iii) It may also be ensured that full value of tenders of SBNs in excess of ₹ 5000 shall be credited to only KYC compliant accounts and if the accounts are not KYC compliant credits may be restricted up to ₹ 50,000 subject to the conditions governing the conduct of such accounts.
iv) The above restrictions shall not apply to tenders of SBNs for the purpose of deposits under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.
v) 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.
vi) The equivalent value of specified bank notes tendered may be credited to a third party account, provided specific authorisation therefor accorded by the third party is presented to the bank, following standard banking procedure and on production of valid proof of identity of the person actually tendering, as indicated in Annex-5 of our circular cited above.
Withdrawal of Legal Tender Character of existing Rs. 500/- and Rs. 1000/- Bank Notes (Specified Bank Notes) – Deposit of Specified Bank Notes (SBNs) into bank accounts- Modification
RBI has reviewed its above referred Circular dt. 19 Dec. 2016 and has advised that the provisions of the said circular at sub para (i) and (ii) are not applicable to fully KYC compliant accounts.