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RBI rolls back one-time deposit norm of old Rs 500 and Rs 1000 notes

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Mumbai: It is another U-turn for India’s beleaguered Reserve Bank of India (RBI) and 60th directive from it. RBI has withdrawn its order restricting people to deposit old bank notes of Rs 1000 and Rs 500 notes denomination above Rs 5000 only once. The bank in the last directive merely two days ago had said that the people doing so will have to tell the bank officials reasons behind the deposit and also source of the money.

Now after facing the ire of common people and opposition parties, the RBI has reversed the order saying that there would be no question asked policy for depositing any amount of money in KYC compliant bank accounts.

Nonetheless, in a face saving attempt, the bank said that the last directive stands for bank accounts which are non-KYC — meaning for those account holders who have not submitted their PAN card number and other details. The upper limit of Rs 50,000 also stays for non-KYC bank accounts, the Reserve Bank of India said.

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Opposition parties that have been calling the notebandi anti-people and suggest that people will teach the BJP a tough lesson in the next election have castigated the RBI for many flip-flops in the last forty days. The Congress said the RBI seems to stand for “Reverse Bank of India” with the CPI-M alleging that the government was operating whimsically over its November 8 decision to recall 86 per cent — in Rs 500 and Rs 1,000 notes — of the total currency in circulation. The central bank said that, on reviewing its notification, it was advising banks to withdraw the one-time deposit condition for amounts above Rs 5,000 for fully KYC-compliant accounts.

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There is no denying that the decision created massive confusion even after Finance Minister Arun Jaitley said people won’t be questioned if any amount of old currency was deposited at one go. The Wednesday decision came after the one-time deposit condition drew widespread flak from both the opposition as well as bank customers. Bank employees and customers said it has been a sea of confusion for them with the government’s and RBI’s ad hocism that has shaken the country’s faith in its banking system.

In the meantime the Congress party spokesperson Randeep Surjewala alleged that the government and the RBI had changed rules 126 times in the last 43 days of demonetisation that have “broken the backbone of common people and farmers”. The Congress leader said there were 55 lakh bank accounts, of which only 36 lakh were KYC-compliant. “So there will be restriction on the remaining 19 lakh accounts.”

On the other hand Marxist leader Brinda Karat said the whole demonetisation exercise was a “whimsical, unplanned and anti-people” move. “The point is that they (the government) wake up, they think something, and by the sunset they have another idea.” Janata Dal-United leader Ali Anwar told IANS: “The RBI has became like the CBI that was called a caged parrot by the Supreme Court” as the anti-corruption probe agency operated under commands of the government. Yogendra Yadav of the Swaraj India Party demanded RBI Governor Urjit Patel’s resignation “for sacrificing autonomy and eroding public confidence in this sacred institution”.

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