Finance Ministry allows banks to deposit junked notes with RBI by July 20

The central bank is yet to release the data on how much of the banned currency was deposited with the banking systems

By: ENS Economic Bureau | New Delhi | Published:June 22, 2017 2:31 am
Finance Ministry, Demonetised notes, DCCB, Old notes Banks and post offices will, however, have to give reasons for not depositing the withdrawn notes within the specified time period “subject to the satisfaction of the RBI”, the ministry said. (File Photo)

The finance ministry has allowed district central cooperative banks (DCCBs), post offices and commercial banks to deposit the banned Rs 500 and Rs 1,000 notes with the Reserve Bank by July 20, provided they were collected within the specified time period.

Through a notification issued in the government gazette on Tuesday, the ministry allowed DCCBs to exchange any old junked notes with RBI in the next one month, which were collected between November 10 and November 14 last year. The government has also allowed banks and post offices the same facility for junked notes collected by them till December 30, 2016.

During the demonetisation period between November 8 and December 30, the government had allowed commercial banks and post offices to accept the junked currency from the public till December 30. District central cooperative banks were allowed to accept them only till November 14.

Banks and post offices will, however, have to give reasons for not depositing the withdrawn notes within the specified time period “subject to the satisfaction of the RBI”, the ministry said. After demonetisation, the government gave holders of the junked currency a 50-day window to deposit it in their bank or post office accounts by December 30.

On November 14, 2016, the Reserve Bank of India clarified that the DCCBs can allow their existing customers to withdraw money from their accounts up to Rs 24,000 per week up to November 24, 2016. However no exchange facility against the specified bank notes Rs 500 and Rs 1,000 or deposit of such notes should be entertained by the DCCBs. In the notification on Tuesday, the ministry said that “specified bank notes may be deposited by such Bank, Post Office or District Central Cooperative Bank, as the case may be, in any office of the Reserve Bank, within a period of 30 days from the commencement of these rules, and get the exchange value thereof by credit” to their account. They should also cite valid reasons for non-deposit of the specified bank notes within the period, it added.

While the grace period for resident Indians to deposit the invalidated currency notes expired on March 31, non- resident Indians have time till June 30 to deposit such currencies. Old Rs 500 and Rs 1,000 notes were junked from November 8, 2016 to eliminate black money, curb circulation of fake Indian currency notes (FICNs) and promote digital transactions. The central bank is yet to release the data on how much of the banned currency was deposited with the banking system.

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