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RBI does a U-turn, rolls back Rs 5000 deposit limit decision

  • The Reserve Bank of India on Wednesday rolled back the restriction it imposed on people looking for depositing Rs. 5,000 or more of the high denomination currency with immediate effect. On Monday, the RBI said deposits exceeding Rs. 5,000 in a bank account would 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 the person depositing as to why this could not be deposited earlier and receiving a satisfactory explanation.”

    Monday’s circular, which also directed banks to preserve the customer’s explanation to facilitate an audit trail at a later stage, triggered a lot of discussion over the sudden decision to restrict the return of the withdrawn currency almost 10 days prior to the originally announced deadline of December 30.

    Finance Minister Arun Jaitley on Tuesday stated that those depositing the demonetized currency for the first time would face no questioning from bank officials.
    Besides Opposition politicians, the All India Bank Officers’ Convention panned the rule. The bank officers sought revocation of the December 19 notification, citing high amounts of stress it was causing to bank officials and the physical harm they were being placed under.
     

    OUR TAKE

    The government here is trying to work on a trial and error basis. The change of policy every week is causing a lot of confusion among the masses. Policies like this which has a wide impact on the general population should be tested first before implementing. While the move may be commendable the general climate is one of panic.


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