RBI Buckles Under Pressure, Withdraws Rs 5,000 Deposit Limit

In a sharp u-turn by the Reserve Bank of India, the restrictions imposed on bank deposits exceeding Rs 5,000 in old notes have now been withdrawn by the central bank. In a circular issued to banks, the RBI said it was revoking the restrictions after reviewing the case. Facing severe criticism over the decision, the RBI removed the restriction for fully KYC-compliant accounts. A RBI notice on December 19 had restricted people from depositing amount over Rs 5000 old currency notes more than once until December 30. The notice had also said that people depositing amounts above Rs 5000 may be questioned as to why they were not able to deposit earlier, adding that the money deposited would be only credited to KYC complaint accounts.