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Deposit Limit of Rs. 5,000 for Non-Compliant Accounts

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Deposit Limit of Rs. 5,000 for Non-Compliant Accounts

Government had given approximately 50 days to people to deposit their old currency notes in the banks post announcement of Demonetisation scheme. Those who got rid of their old notes are breathing a sigh of relief but the notification spelled trouble for procrastinators. As per the circular, deposit of old currency worth more than Rs. 5,000 can only be made once per account. However, the hues and cries from the public which followed this announcement forced government to make some revisions immediately.

Can you bypass this limit?

The limit imposed can be bypassed if the depositor gives proper justification on record in front of at least 2 bank officials to explain why he failed to deposit the old notes earlier. The deposit limit will be applicable even on cumulative deposits if they exceed Rs. 5,000. Even after giving valid reason, one cannot deposit old money larger than Rs. 50,000 in a KYC non-compliant account. For a KYC compliant account, there is no limit on deposit of currency notes till 30th December. A person choosing to deposit old notes under Pradhaan Mantri Gareeb Kalyan Yojna can do so without any upper limit.

Why has the limit been imposed?

Government said that out of Rs. 15.4 lakh crores worth of old notes in circulation, Rs. 13 lakh crores of such notes have already been deposited by people. Moreover, trading with old notes was disallowed with the announcement of demonetisation scheme so there is no apparent reason for holding back old notes. So, same person depositing old notes in small amounts regularly into bank accounts can become an obvious suspicious activity in the eyes of the government. One cannot give reason that he has been earning income in the form of redundant currency as government has left no scope for it. Government hopes to curtail long queues outside banks to deposit old notes.

Post demonetisation, government has issued several notifications to control the currency crisis and close any escape routes of black money hoarders they can uncover. Meanwhile, common man might suffer some more till the situation normalizes in a matter of months.

Neha Joshi
Neha Joshi
Neha Joshi is a Chartered Accountant and an Assistant Manager at H&R Block. She is the Head of Content and is responsible for strategizing the entire content for website, PR and social media. She comes with a rich experience in publishing where she wrote books for various international professional qualifications. She was also a trainer for the subjects she wrote.

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