DCM (Plg) No. 1859/10.27.00/2016-17

December 19, 2016

The Chairman / Managing Director/ Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/ Regional Rural
Banks / Urban Cooperative Banks/ State Cooperative Banks

Dear Sir,

Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.

2. Please acknowledge receipt.

Yours faithfully

(P Vijaya Kumar)
Chief General Manager

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6 responses to “RBI restriction on cash deposit of more than Rs. 5000 in a Bank Account”

  1. Ashok M Rane says:

    This is d Punishment for citizens who waited for depositing their old notes in Bank Accounts with the reason to avoid rush on Bank Counters. This is cheating. Govt should keep the date as announced earlier, ie upto 30th Dec 2016and withdraw this new changes.

  2. Hardev Singh Batra says:

    Sir,if the amount over and above Rs.5000.00 is deposited in the bank account on 19-12-2016 before RBI circular was received by the bank branch then what will be the position of the deposit made.As the captioned circular issued by on RBI on 19-12-2016 is received by the bank branches on 20-12-2016 and the banks started acting upon this circular w.e.f.20-12-2016.
    What will be liability of the depositor who deposited cash of over and above Rs.5000.00 in his account on 19-12-2016 ?

  3. Common Man says:

    This is one more way to harass normal people……Rs.5000/- is a very small amount and the limit should be increased to at least 50000/- as there are many people who haven’t deposited their money due to long ques and office attendance which cannot be afforded. Has the government checked the political parties and RBI officials have directly been sending funds to the business houses and political parties.

  4. subir says:

    exactly . agree with the above .Govt should not change statement again and again. this will misguide and harassing the citizen. some time as per govt. we have givn advise to some one but next fortnight this advise become wrong as statement changed

  5. Stan says:

    After waiting for queues to reduce in order to deposit our money this is what we get. This Govt. is playing blind man’s buff.

  6. Chandrashekar Rao Kuthyar says:

    This kind of micro-level control over people’s finances is not healthy. This is a direct attack on the privacy and freedom that a citizen of India ought to be enjoying. The Govt is contradicting itself through numerous press statements and circulars.

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