After RBI order, banks refuse deposits over Rs 5000 despite explanation

New Delhi: The Reserve Bank of India (RBI) move to disallow deposits of over Rs 5000 more than once till December 30 has resulted in some unintended consequences.

Banks are now refusing to take deposits over the said amount, despite being given detailed explanations, said a report.

Nalin Kaushik, a Punjab-based lawyer, wrote on Twitter that his bank branch in Sunet, Ludhiana, was not accepting deposits of old notes, said the report.

Noida-based Udit Kothari also said his bank in Meerut was not accepting funds above Rs 5,000, even after giving justification.

Depositors are thus feeling the pain and claim that this move by the RBI is unfair. Their gripe is that when depositors prior to December could deposit money without being questioned, there should no reason they can’t do so now, said the report.

But bankers are wary about accepting these deposits, fearing that they could be harassed by tax authorities later for justification.

“The government and the RBI should have allowed all deposits to come in till December 30. Immediately thereafter, the I-T Department could have swung into action, questioning depositors as to the source of the cash deposit,” a Union Bank of India official was quoted as saying.

However, despite customer complaints, banks have no choice but to comply with the RBI directive.

But the directive seems to have taken a toll on deposits, said the report. A Central Bank of India branch head said since the demonetisation drive was announced his branch, on an average, received Rs 20-25 lakh in demonetised notes daily as deposits.

However, on Tuesday, the branch received only Rs 4 lakh worth such notes.