RBI withdraws limit of Rs 5000 deposit. No questions will be asked from KYC account holders

After facing backlash from several quarters, the RBI has withdrawn its decision just 2 days after announcing its decisions saying that no questions will be asked to Know your customer account.

Reserve Bank of India (RBI) has taken a massive  U-turn from its decision on the Rs 5000 order just two days after its announcement. Now, RBI has announced that KYC account holders will not be questioned on depositing an amount over Rs 5000.

This came just two days after the RBI announced that the old currency notes of Rs 500 and Rs 1000 of more than Rs 5000 can be deposited only once per account until 30 December.

The Union Finance Minister Arun Jaitley on Monday said that every person should go and deposit old and now illegal Rs 500 and Rs 1000 currency notes in one-go as multiple deposits raises questions.

The Finance Minister further asserted that the Reserve Bank of India is prepared to dispense the necessary notes not only till 30 December but even after that and that there has been not a single since Prime Minister Narendra Modi announced his demonetisation drive.

However, under the Taxation & Investment Regime for Pradhan Mantri Garib Kalyan Yojana PMGKY 2016, there is no limit on quantity or value of specified bank notes tendered for payment & deposit.The RBI further affirmed that full value of tenders of SBNs in excess of Rs 5000 shall be credited to only KYC compliant accounts while asserting that if accounts are not KYC compliant, credits may be restricted up to Rs 50,000 subject to conditions governing the conduct of such accounts.

Also, according to the norm if you are depositing more than Rs 5000 or a huge sum of money till 30 December the bank will also ask you to explain that particular income. You may have to justify why you chose to deposit that amount of money since the decision to demonetise Rs 500 and Rs 1000 notes were made on 8 November.