59 demonetisation changes before 50 days: Here are 10 important developments

By: |
New Delhi | Updated: December 20, 2016 12:22:33 PM

Ever since the announcement of demonetisation on November 8 by Prime Minister Narendra Modi, there have been several flip flops over the implementation of the drive.

demonetisation flip flops, note ban flip flops, demonetisation effect, narendra modi, finannce ministry, rbi, arun jaitley, demonetisation impact, demonetisation result, demonetisation news, note ban news, demonetisation update, demonetisation latest news, latest demonetisation news, latest note ban news, note ban impact, pm modi, modiA woman cleans an ATM which is out of service in Mumbai, India on November 11, 2016. (Reuters file photo)

Ever since the demonetisation announcement on November 8 by Prime Minister Narendra Modi, there have been several flip flops over the implementation of the drive. The latest came on Monday when the Ministry of Finance and Reserve Bank of India (RBI) said people can deposit amounts above Rs 5000 in banned Rs 500 and Rs 1000 notes only once till December 30.

Incidentally, the notification on Monday was the 59th communication issued by RBI-Finance Ministry combine in less than 50 days of demonetisation. While announcing the decision, PM Modi had asked people to “put up with the difficulties” for 50 days. He had said, “You will have 50 days to deposit your notes and there is no need for panic.” The PM had also announced the amount people would be allowed to withdraw, deposit or exchange at banks. However, frequent changes in the terms of condition have increased woes of depositors, especially in rural areas.

Here we take a look at 10 important developments that show the journey of demonetisation flip flops:

1. Deposit above Rs 5000 in banned notes only once until December 30

The RBI-Finance Ministry notification on Monday said, “Tenders of SBNs (Specified Bank Notes of Rs 500 and Rs 1,000) in excess of Rs 5,000 into a bank account will be received for credit only once during the remaining period till December 30, 2016.”

2. Banks to question deposits over Rs 5000

The notification further said, “The credit in such cases shall be afforded only after questioning (the) 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 notification also told banks to keep on record the explanation to be offered by customers to bank officials on deposits over Rs 5,000 “to facilitate an audit trail at a later stage”. “An appropriate alert also should be raised in CBS (core banking system) to that effect so that no more tenders are allowed,” it added.

3. No limit on deposits in Pradhan Mantri Garib Kalyan Yojana, 2016

The notification didn’t put any restriction on people making deposits using the withdrawn currency notes under the Pradhan Mantri Garib Kalyan Yojana, 2016. “Further, an opportunity has been given to the public to make the payments towards tax, penalty, cess/surcharge and deposit under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016 with the old bank notes of Rs 500 and Rs 1,000 denomination up to December 30, 2016,” the notification said.

4. You may be questioned even if you deposit any amount below Rs 5000 multiple times before December 30

The RBI said, “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.”

5. Full amount of deposits over Rs 5000 only in KYC-compliant accounts

“It may also be ensured that full value of tenders of SBNs in excess of ₹ 5000 shall be credited to only KYC compliant accounts,” the notification said.

6. Deposit limit of Rs 50,000 in non-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,” said RBI.

7. There was no restriction for deposits up to Rs 2.5 lakh initially

Since November 8, the government has said people can freely deposit up to Rs 2.5 lakh without facing tax scrutiny. Monday’s notification would worry those who were waiting for the return of normalcy in banks.

8. Government had urged people not to rush, spread out their deposits

Finance Minister Arun Jaitley was quoted as saying by IE on November 11, “We do believe that there is no need to rush in the initial days because people have a lot of time till December 30 with the entire banking and post office system and therefore more the deposits and the (note) exchanges are spread out, the more will be the convenience to the people itself.”

9. Government hopes all people have already deposited their old notes

The Finance Ministry on Monday said, “The deposits of old notes of Rs 500 and Rs 1,000 denominations have been reviewed by the government from time to time. Already more than five weeks have elapsed since the time of the announcement of the cancellation of the legal tender character of these notes. It is expected that, by now, most of the people would have deposited such old notes in their possession.”

10. On November 8, PM Modi asked people not to panic and said anyone can deposit banned notes without any limit till December 30

“Persons holding old notes of Rs 500 or Rs 1,000 can deposit these notes in their bank or post office accounts from November 10 till close of banking hours on December 30, 2016 without any limit. Thus, you will have 50 days to deposit your notes and there is no need for panic. After depositing your money in your account, you can draw it when you need it,” the PM had said.

Do you know What is Repo Linked Lending Rate (RLLR), Wholesale Price Index (WPI), Public Debt, Finance Commission Grants & Other Transfers, Economic Survey? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.