5000 rule explained by FM

Deposits on above Rs 5000 banned currency notes can make until the last date 30th December 2016. On Monday, the Reserve Bank of India (RBI) announced the latest banking restrictions of Rs 5000 rule after the government recalled the high-value bills.

The accounts must also be valid with customer information details. Out of Rs 15.4 lakh crore nearly Rs 13 lakh crore worth 500 and 1000 currency notes already deposited in the banks. Now the government revised the rules to mandate that people can deposit Rs 5000 of old currency bills only once till the last date.

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What is Rs 5000 rule?

The amount of Rs 5000 or less can continue to be deposit in the banks without any restrictions. As per the announcement made by the Finance Minister Arun Jaitley, no questions will ask if the amount of scrapped rupee notes deposit. But after two or repeated deposits, people have to face the queries.

“Anyone who has old currency notes is not allowed to trade in them. He can only go and deposit them with banks,” Arun Jaitley said on introducing the Rs 5000 rule.

“If they go and deposit with the bank any amount of currency, no questions are going to be asked to them and therefore the 5000 rupee limit does not apply to them – but (only) if they go and deposit it once.

“But if they are going to go every day and deposit some currency (small amounts), same person, that gives rise to a suspicion that where is he acquiring this currency from. In that event, a person may have something to worry about. Therefore everyone advised whatever old currency you have, please go and deposit it now,” he said.

After banning old 500 and 1000 rupee notes from 8th November, the government allowed individuals to deposit banned notes till 30th December 2016. Earlier there is no limit on the quantity, but on 17th December the government issued a gazetted notice.

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With a view to “reduce the queues in the banks”, the Reserve Bank of India said it has now decided that “amounts exceeding Rs. 5,000 in old notes can be deposited only once between now and December 30, 2016.”

“The banks advised conducting due diligence regarding the reasons for not collecting these notes earlier,” the statement said.

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