Arun Jaitley explained the new Rs. 5,000 deposit rule; will reduce queues at banks. he said.
Highlights
- No scope but to deposit old notes now that exemptions are over: Jaitley
- New rule as government presumes in 5 weeks most have deposited old notes
- RBI is changing rules like PM changes his clothes: Rahul Gandhi tweeted
Finance Minister Arun Jaitley today explained the latest change in rules for depositing old notes in bank accounts, criticised by the opposition as "desperate measures." The government had said on Monday that people can from now till December 30 make just one deposit of more than 5,000 rupees in banned 500 and 1,000-rupee notes and will have to explain why they had not deposited the money earlier. The Finance Minister has since clarified that no questions will be asked if any amount of the banned currency is deposited in one go, but said repeated deposits may raise queries.
Here are the top 10 developments in the story:
"If you have old currency, deposit it with banks at one go as repeat deposits of such notes raise doubts," Mr Jaitley said today, explaining that with all exemptions for use of old notes - like at petrol pumps - now over, there is no scope to do anything with them but to deposit them in bank accounts.
While issuing the new restrictions on Monday, the government said it was presuming that in the five weeks since Prime Minister Narendra Modi announced the ban on high-value notes aimed at combating black money, most people would've deposited their old notes.
It said for deposits over 5,000 rupees in old notes two bank officials would have to be given a "satisfactory explanation" on why the deposit had not been made earlier.
Angry customers have pointed that the Finance Minister and others in the government had earlier told people that they need not rush to deposit the banned notes since they had till December 30 to do so.
"RBI is changing rules like the PM changes his clothes," tweeted Congress vice president Rahul Gandhi, who has led a united opposition in a pitched battle with the government over the notes ban and the impact on people of a massive cash crunch that has followed.
"RBI makes new rule on deposit, FM contradicts. Who should citizen believe? Neither has credibility," tweeted former Finance Minister P Chidambaram, asking, "Old notes usable until Dec 15. Why can't we deposit remaining notes until Dec 30 as notified?"
After announcing the ban on 500 and 1,000-rupee notes in a sudden announcement on November 8, PM Modi had said people had till December 30 to deposit old notes in their bank accounts. The government had later said that deposits of up to 2.5 lakh in old notes in a bank account would not attract scrutiny by income tax officials.
The notes ban took out 86 per cent of the currency in circulation or 15.44 lakh crore. More than 13 lakh crore of that has been returned to banks and experts say virtually all the money that was outlawed will be returned, which challenges the government's claim that the demonetisation would unearth about Rs 5 lakh crore in undeclared money.
The Prime Minister's decision has been widely praised for intent, but has been faulted for execution, with the new currency not introduced fast enough to ease long lines at banks and ATMs.
Mr Jaitley said today that the Reserve Bank of India has enough currency in its chests to last "far beyond" December 30. "There was not a single day when RBI has not released adequate currency to banks. There was a certain level of currency that was to be released and there was full preparedness for it," he said.
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