Banks stop questioning depositors of KYC-compliant accounts after new RBI instructions

Banks on Wednesday began accepting the junked Rs 500/1000 notes in KYC-compliant accounts without any questions following RBI’s rollback of its stiff conditions a day after customers were subjected to queries while depositing old currency.

With hardly 10 days to go before the deadline ends for depositing the scrapped notes, banks continued to witness rush with tempers flaring occasionally as the RBI notification came during the banking hours, not before the start of the day.

Banks were on Tuesday directed by the Reserve Bank of India to ask questions to customers depositing over Rs 5,000 as to why they had failed to deposit the old notes earlier.

People crediting money to such accounts were subjected to questioning, on record, in the presence of at least two officials of the bank before receiving a satisfactory explanation.

Under all-round attack, RBI on Wednesday did a U-turn on customers depositing demonetised notes over Rs 5,000 till December 30 by making it clear that there will be no questions asked either in case of one-time or repeat deposits if the accounts are KYC-compliant.

Banks in turn directed branches minutes after RBI issued the notification and bankers promptly started following it from the afternoon.

The RBI turnaround came as Finance Minister Arun Jaitley’s assurance on Monday night and Tuesday that there will be no questions asked to customers who would make one-time deposit above Rs 5,000 failed to persuade bank officials who insisted that there should be fresh circular from RBI so that customers will not be harassed.

However, customers with non-KYC accounts will be subject to stiff conditions imposed by RBI on December 19 for deposit of junked notes.

The decision follows widespread criticism of the guidelines, with people saying the Prime Minister as well as the finance minister have asked people not to throng the banks as they have time till December 30 to deposit invalid notes in their accounts.

The December 19 notification of RBI had said tenders of old currency 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.

Bankers were not comfortable with the investigative role being thrust on them.

All India Bank Officers’ Confederation (AIBOC) today registered a protest to RBI and demanded complete withdrawal of the order as the staff are facing public wrath.

Besides, they requested RBI for adequate cash availability to banks and to ensure that all banks are treated equally without any bias.

Officers union staged demonstrations all over the country in front of Reserve Bank of India offices in the evening to press for various demands.