Rs 5000 deposit: Wont have to explain delay to bankers, Finance Minister Jaitley says

A day after Government of India issued a notification stating that any individual who is not KYC (Know Your Customer) compliant depositing more than Rs 5000 in their bank accounts will have to explain to two bankers in writing why they did not deposit the money so far, Finance Ministery Arun Jaitely may be looking to withdraw this notification.

The notification said that this is in order to create an audit trail so that depositers could be questioned by relevant tax authorities at a later date. It said, "Provided that the deposit up to the amount of Rs 5000 shall be made directly into such account and the rest of the amount, if any, shall be subject to such conditions as the Reserve Bank of India may specify: Provided further that the deposit of an amount exceeding Rs 5000 shall be made only once per account until 30th December, 2016."

Following this, RBI stated rules that said that the credit of old notes will be afforded only after questioning 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.

In case the involvement of third party, the RBI said that the equivalent value of old notes may be credited to a third party account, provided specific authorisation therefore accorded by the third party is presented to the bank, following standard banking procedure and on production of valid proof of identity of the person actually tendering, it said. 

However, Finance Minister Arun Jaitley may have given in to the all round criticism that this move attracted soon after. 

In less than a day of issuing these guidelines, Jaitley on Tuesday said that a depositor will not be quetioned by two bankers if they are depositing more than Rs 5000 till December 30, 2016. 

He said that there will be no questioning if all the money is being deposited in one go till the deadline.