Ever since it was announced that quoting PAN would be mandatory for opening new accounts or depositing over Rs 50,000 in time deposits, customers have reacted, and mostly with panic. Says a senior banker with a private bank: ``Making PAN mandatory for deposits of over Rs 50,000 is a derogatory step. As a result, people have already started splitting up their accounts and withdrawing hastily. Even when we explain to the customers that old accounts will be safe even without PAN, they are not ready to listen.''

Not only are people knocking down the deposit amount to below Rs 50,000, they are also not opening new accounts because of the same fear, adds the official. So, the generaltendency is to move away from the banking system and hoard money at home. ``It's like sucking back the economy, thereby reversing the positive trend brought about by former finance minister P Chidambaram through the Voluntary Disclosure of Income Scheme (VDIS).'' This official feels that it's bound to be a major issue with both banks and customers, and that banks' associations must take it up.

But Suresh Nanda, senior vice-president, ICICI Bank, says that it's only a short-lived reaction. Responding positively to making PAN mandatory for new accounts and any deposit of over Rs 50,000, Nanda says: ``There can be a short-term impact on the customers. But people can't escape the banking system forever, can they?''

Calling the use of PAN a step in the right direction, Nanda adds: ``When there's an initiative to put a system in order, we should encourage it.'' PAN is a good thing to happen, according to him, and should be used for all financial transactions. The only problem is in its implementation, hesays.

``Once PAN is issued to all applicants, quoting PAN should not pose a problem to any customer,'' Nanda adds. Every new concept meets with resistance, but with time, the dust settles down, according to him.

A State Bank of India (SBI) official supports Nanda's view. The official says: ``If the government wants to regulate the economy, certain measures will have to be taken, and use of PAN in running accounts is one of them.'' What about the panic reaction of the customers? Replies the SBI official: ``It's a short-term impact, which will die down.''

Moreover, even if one does not have PAN, one can do with the General Index Reference number (GIR) on the PAN application, he says. But the point is one has to make the effort to apply for PAN.

But as Vijay S Mehta, a banking consultant, puts it: ``While the requirement of PAN appears to be well-intentioned to channel funds into the banking stream, the limit of Rs 50,000 is conservative in the present day scenario of level of savings.''

Meanwhile,bank deposits and depositors are not the only victims of this move. Even clubs and hotels have begun cancelling old bookings of those without PAN. On the whole, a chaotic scenario prevails, where customers cannot figure out what to do, while they get to hear varied versions of the same story from time to time.