Union Budget 2019: The government is planning to prevent the deposit of cash in bank accounts if that is being done without the knowledge of the account holder. This was announced by Finance Minister Nirmala Sitharaman during her budget speech.
It may be noted that during the demonetization phase, there were many reports of cash being deposited in the bank accounts of individuals, which was done without the consent or information of the account holders, especially in the case of Jan Dhan accounts. This also put many account holders into trouble.
In the budget speech, Finance Minister Nirmala Sitharaman said, “Government will initiate steps to empower accountholders to remedy the current situation in which they do not have control over a deposit of cash by others in their accounts. Reforms will be undertaken to strengthen governance in Public Sector Banks.”
As of now, you can deposit cash in a person’s bank account without their knowledge or consent. To do so, the depositor just needs to know the bank account number of the recipient. For instance, a person can deposit cash into any ICICI Bank account holder’s account via a cash deposit machine of ICICI Bank just by entering their 12 digit account number. You can also deposit cash by simply filling up a cash deposit slip and deposit cash at a bank branch. However, some banks also levy charges if cash is deposited into the savings accounts at non-home branches. Now, with the proposed changes, the account holder has to give his/her consent before cash is deposited into their account.
Experts say such changes were required because generally these type of deposits are seen as the income of the account holder, which also leads to increased tax liability.
However, no such banking reforms have been implemented yet. We have to wait and see what measures the banking regulator takes.