Note ban: RBI, Arun Jaitley want you follow these contrasting directives for depositing old notes

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After floundering over the implementation of the note ban several times and issuing new notifications to this effect, the government and RBI on Monday added more to the confusion prevailing in the minds of common man hit by the demonetisation move of the former.

The Reserve Bank of India on Monday morning announced that defunct currency notes of Rs 500 and Rs 1,000 exceeding Rs 5,000 can only be deposited once per account until December 31, 2016 only after showing reasons for not doing so earlier.

According to the RBI, the explanation for the delay in depositing should be kept in record for a possible audit trial at a later stage.

Additionally, people who deposit smaller amounts which, once when added up, exceeds Rs 5,000 will be asked for a record explanation too.

The move is seen by many to avoid a situation where all the cash with people comes back to banks. With almost 10 days left for the deadline to deposit old currency, possibilities are high that all 86 per cent of the currency called back by the government gets deposited in the banks. This would mean either there was no black money in the system or the hoarders succesfully converted the currency into white without catching the government’s eye.

This would be seen as a major embarrassment for the government which started the demonetisation drive with an objective to catch black money hoarders.

As of now, almost Rs 13 lakh crore out of the Rs 15.4 lakh crore demonetised currency notes have been deposited in the banks.

The above announcement was contradicted by the government on Monday evening when Finance minister Arun Jaitley said no questions will be asked if any amount of junked currency is deposited in one go but repeated deposits may raise queries.

With a view to curtail queues at banks, holders are encouraged to deposit the entire holding in one go, rather than going repeatedly.

“If they go and deposit with bank any amount of currency no questions are going to be asked to them and therefore the 5000 rupee limit does not apply to them if they go and deposit it once. But if they are going to go everyday and deposit some currency, same person, that gives rise to suspicion that where is he acquiring this currency from. In that event a person may have something to worry about. Therefore everyone is advised whatever old currency you have please go and deposit it now,” he said.

Clearly, if you were to deposit all old currency notes in one go, the bank officials will quiz you on why they were not brought to the notice of the bank earlier.

The two announcements, in sharp contrast to each other, add to a series of measures taken by the government to ease situations arising out of note ban. Earlier, the cash deposit and withdrawal and exchange limits have been revised several timesĀ  with the government even asking banks to mark those exchanging notes with blue ink used in elections. All these steps have shown the management of the note ban move in bad light.

Monday’s directives from the governemnt and RBI make the implementation of the biggest reform in the recent times more murkier.

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