The RBI has now amended its rule that made it mandatory for banks to seek an explanation from a customer depositing cash above Rs5000 in old notes, and limited the number of times such deposit can be made to just once till the deadline of December 30.
The new modification now allows fully KYC ( Know your Customer) compliant account holders to deposit over Rs 5000, multiple times, without any questions asked . If an account is KYC compliant, it means the banks are sure about the identity and address of the customers.
The RBI turnaround came after Finance Minister Arun Jaitley's assurance on Monday night that customers who make one-time deposit above Rs 5,000 will not be grilled failed to persuade bank officials who insisted that there should be fresh circular from RBI.
On Monday, the Reserve Bank came up with a new rule curbing deposits above Rs 5000 to just once till the deadlines expires onDecember 30. And it also said if someone has Rs5000 old notes, a deposit will be allowed after the person explains to the bankers why he couldn't deposit earlier. It flew in the face of the government's earlier assurance that deposits can be made multiple times beforeDecember 30.
The credit in such cases, it said, would be allowed only after the depositor explains satisfactorily, on record, in the presence of at least two officials of the bank.
There is another about turn by the RBI.
Though the earlier notification had exempted deposits less than Rs 5000 from scrutiny, it had a rider: if multiple deposits add up to more than Rs 5000, they might have to follow the rules of deposits above Rs 5000. Now these clause too has been nixed.