THE Reserve Bank of India (RBI) Tuesday issued a notification directing bank chiefs to preserve CCTV recordings of operations at branches and currency chests to identify and help enforcement agencies take action against “illegal accumulation of new currency notes”.
The RBI said that banks are “advised to preserve CCTV recordings of operations at bank branches and currency chests for the period from November 8 to December 30, 2016, until further instructions, to facilitate coordinated and effective action by the enforcement agencies in dealing with matters relating to illegal accumulation of new currency notes”.
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This was the 51st communication issued by the administration — RBI and Finance Ministry — in the 35 days since the demonetisation policy was announced on November 8.
The string of notifications, circulars and releases issued to bank chiefs, utilities and the public was mainly about policy tweaks and repeated changes to provisions relating to issues such as exemptions granted for use of old notes, limits on exchange of notes at bank branches and caps on withdrawal limits for individual accounts.
At last count, there were 41 notifications and circulars from the RBI on issues related to demonetisation since the old Rs 500 and Rs 1,000 currency notes were withdrawn. Another 10 were issued by the Finance Ministry.
On November 13, with queues for exchange of notes turning serpentine, the government and the central bank moved to first increase the daily exchange limit set at Rs 4,000 to Rs 4,500. Then, it was brought down to Rs 2,000 once per person beginning November 18. On November 15, the decision to use indelible ink to mark individuals who have exchanged their currency was announced.
As lower exchange limits and inking did not help in reducing queues, and the facility was allegedly being misused by many in submitting unaccounted old notes, an announcement was made to stop exchange at bank counters from November 25. This was despite the government’s initial assurance that the exchange limit will be raised after November 24. The facility to exchange notes was subsequently allowed at RBI offices.
Another announcement followed on November 24, when the government advanced the deadline for using old Rs 500 notes at petrol pumps and for airline tickets at airports, bringing it forward by a fortnight from December 15 to December 2.
On usage of old Rs 500 notes at toll counters of National Highways Authority of India, the government had earlier allowed it till December 15, but later made it conditional only for purchase of FASTag and in cases where toll fee exceeds Rs 200.
With deposits of old notes at banks surging on a daily basis, the government on November 28 announced a fresh scheme — the Pradhan Mantri Garib Kalyan Yojana — on declaration of black money, coming just two months after the closure of the Income Declaration Scheme that was billed as a “last chance” to come clean.
Then, on December 1, clarifying on the amendments in the Income Tax Act moved through the Taxation Laws (Second Amendment) Bill, 2016, the Finance Ministry announced that that no “new provision” has been introduced to tax jewellery purchased from legal income, even as it reiterated a 1994-dated CBDT instruction on gold limits that would apply in the event of the tax department’s search-and-seizure operation.
The Ministry subsequently issued a series of clarifications on this issue, wherein it stated that there is no limit on holding jewellery and ornaments if it is acquired from “explained sources” of income, including inheritance.
There were also a number of relaxations and extensions to ease the cash crunch during the first month. These include a doubling of balance in prepaid wallets to Rs 20,000 till December 30; a waiver on transaction charges on debit and credit cards; allowing withdrawal of Rs 2.5 lakh for wedding-related expenses; and, raising the cap on weekly cash withdrawals from banks to Rs 24,000 from Rs 20,000 among others.
There were also a series of exemptions announced for farmers faced with a cash crunch ahead of the rabi sowing.