RBI partially withdraws one-time deposit norm after public anger
New Delhi, Dec 21 In a sharp U-turn, the RBI on Wednesday partially withdrew its order barring people with KYC-compliant bank accounts from depositing over Rs 5,000 in old currency more than once until December 30 after a massive public outrage and criticism by the opposition.
But the December 19 notification stands for bank accounts which are non-KYC -- meaning for those account holders who have not submitted their PAN card number and other details. The upper limit of Rs 50,000 also stays for non-KYC bank accounts, the Reserve Bank of India said.
The flip-flop, the Congress said, made the RBI "Reverse Bank of India" with the CPI-M alleging that the government was operating whimsically over its November 8 decision to recall 86 per cent -- in Rs 500 and Rs 1,000 notes -- of the total currency in circulation. The Aam Aadmi Party (AAP) emphasised that confusing rules meant that the government had lost control over banks.
The central bank said that, on reviewing its notification, it was advising banks to withdraw the one-time deposit condition for amounts above Rs 5,000 for fully KYC-compliant accounts.
The December 19 notification said deposits of demonetised Rs 500 and Rs 1,000 notes in excess of Rs 5,000 will be allowed only once till December 30 -- that too after strict scrutiny. The decision created massive confusion even after Finance Minister Arun Jaitley said people won't be questioned if any amount of old currency was deposited at one go.
The Wednesday decision came after the one-time deposit condition drew widespread flak from both the opposition as well as bank customers. Bank employees and customers said it has been a sea of confusion for them with the government's and RBI's ad hocism that has shaken the country's faith in its banking system.
"I really don't believe an institution like RBI, which is the trustee of our money, can do this," said Naresh Kumar Aggarwal, a chemist in south Delhi, who had come to a State Bank of India branch here to deposit money in old currency notes. He said he was allowed but was still "interrogated by bank officials".
An HDFC Bank employee in south Delhi, who didn't wish to be named, said his office has dedicated one person for keeping check on RBI's website to see if any order has been withdrawn or changed. "I am not joking. There is so much confusion regarding what to do and what not do," he said.
For many, anger gave way to sarcasm. Vikas Sharma, a junior lawyer in Delhi High Court, said the central bank "needs an immediate name change". "Call it the Reverse Bank of India. After all, it has been reversing its own decisions for the past six weeks," Sharma said standing in a queue outside an ATM outlet in Noida near Delhi.
Another man from the queue shouted: "Why not the Rollback Bank of India or even Rozana (daily) Bungling of India?" Congress spokesperson Randeep Surjewala alleged that the government and the RBI had changed rules 126 times in the last 43 days of demonetisation that have "broken the backbone of common people and farmers".
The Congress leader said there were 55 lakh bank accounts, of which only 36 lakh were KYC-compliant. "So there will be restriction on the remaining 19 lakh accounts." Marxist leader Brinda Karat said the whole demonetisation exercise was a "whimsical, unplanned and anti-people" move. "The point is that they (the government) wake up, they think something, and by the sunset they have another idea."
Janata Dal-United leader Ali Anwar told IANS: "The RBI has became like the CBI that was called a caged parrot by the Supreme Court" as the anti-corruption probe agency operated under commands of the government. Yogendra Yadav of the Swaraj India Party demanded RBI Governor Urjit Patel's resignation "for sacrificing autonomy and eroding public confidence in this sacred institution".