NEW DELHI:  After banning old 500 and 1,000 rupee notes on November 8, the government had allowed all of the cash holdings with any person to be deposited in bank accounts till December 30. There was no limit on the quantity or value of the junked notes that could be deposited.

However, the government on December 17 issued a gazette notification putting restrictions on deposits henceforth.

  • Tightening rules for depositing junked 500 and 1,000 rupee notes, the government today said individuals can deposit over Rs 5,000 in old currency bills only once until December 30 and that too after explaining why it had not been done so far.

  • "The deposits of old notes of Rs 500 and Rs 1,000 denominations have been reviewed by the government from time to time. Already more than five weeks have elapsed since the time of the announcement of the cancellation of the legal tender character of these notes. It is expected that, by now, most of the people would have deposited such old notes in their possession," an official statement said.

  • With a view to "reduce the queues in the banks", the government said it has now been decided that "amounts exceeding Rs 5,000 in old notes can be deposited only once between now and December 30, 2016."

  • "The banks have been advised to conduct due diligence regarding the reasons for not depositing these notes earlier," the statement said.

  • Amounts of Rs 5,000 or less may continue to be deposited with banks in the customer's account, as at present.

  • "However, cumulative deposits exceeding Rs 5,000 between December 19 and December 30, 2016 will be as per the procedures advised by the RBI in respect of deposits exceeding Rs 5,000," it said.

  • The Reserve Bank of India (RBI) too came out with deposit guideline stipulating that restrictive conditions will also apply on the cumulative deposit of such notes in a single account when it exceeds Rs 5,000.

  • However, the defunct currency up to any amount can be deposited under the new black money amnesty scheme, PMGKY.

  • Also, the government said a separate notification has been issued allowing District Cooperative Central Banks (DCCBs) to deposit the old notes they collected between November 10 and 14.

  • "NABARD, which supervises the DCCBs, will conduct complete audit check of the Know Your Customer (KYC) documents of the individual customers who have deposited these notes or of the members of the Primary Agricultural Credit Society (PACS) who have deposited these notes," the statement said.

  • The RBI in a notification said certain restrictions have been placed on deposits of Specified Bank Notes of 500 and 1,000 denominations, but there is no limit for payment of tax using such notes under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.

  • Under the PMGKY scheme, black money holders can deposit unaccounted cash in account which will be subject to 50 per cent tax and 4-year interest free lock-in for the remaining 25 per cent of the amount.

  • The RBI said old notes in excess of Rs 5,000 into a bank account will be received for credit only once during the remaining period till December 30, 2016.

  • "The credit in such cases shall be afforded only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation," it said.

  • The explanation, RBI added, should be kept on record to facilitate an audit trail at a later stage. An appropriate flag also should be raised in CBS (Core Banking Solution) to that effect so that no more tenders are allowed.

  • However, old notes up to Rs 5,000 received across the counter will allowed to be credited to bank accounts in the normal course until December 30, 2016.

  • "Even when tenders smaller than Rs 5,000 are made in an account and such tenders taken together on cumulative basis exceed Rs 5,000 they may be subject to the procedure to be followed in case of tenders above Rs 5,000, with no more tenders being allowed thereafter until December 30, 2016," the RBI said.

  • It said that equivalent value of specified bank notes tendered may be credited to an account maintained by the tenderer at any bank in accordance with standard banking procedure and on production of valid proof of identity.

  • "The equivalent value of specified bank notes tendered may be credited to a third party account, provided specific authorisation therefor accorded by the third party is presented to the bank, following standard banking procedure and on production of valid proof of identity of the person actually tendering," the RBI said.


Following the demonetisation of Rs 500/1,000 notes on November 8, government had allowed people to use such notes for certain public utility bill payment as well as for payment to government hospitals and asked them to deposit the amount in bank accounts.