In a U-turn, RBI withdraws `5k restriction on deposits
Ordinance alters businesses to pay salaries by cheque and e-payment
The Reserve Bank of India (RBI) took a U-turn on Wednesday as it withdrew its restrictions that deposits of above `5,000 in banned banknotes can be made only once till December 30.
The central bank said deposits in excess of `5,000 will be allowed more than once till the stipulated date, but the depositor’s bank account should be compliant with customer information details, called KYC.
People with non-compliant accounts will have to get the KYC done before depositing scrapped 500- and 1,000-rupee notes.
The RBI’s about-turn is the latest in a series of policy tweaks after the government recalled the high-value bills. The “flip-flop”, the Congress said, made the RBI “Reverse Bank of India”. The CPI(M) alleged that the government was operating whimsically over its demonetisation drive, while the Aam Aadmi Party said Members of the All India Bank Officers Confederation protest against the notes ban outside the RBI building in New Delhi.
the confusing rules reflect that the government has “lost control over banks”.
The RBI rule reversal happened on a day the Centre approved an ordinance to amend the payment of wages act, which will allow business
and industrial establishments to pay salaries electronically or through cheques.
Employers will also have the option to pay wages in cash. The ordinance route was taken after the Payment of Wages (Amendment) Bill, 2016, which was introduced in the Lok Sabha on December 15, couldn’t be ratified because of the government-Opposition standoff over demonetisation and the subsequent cash crunch in the country.