In a U-turn, RBI with­draws `5k re­stric­tion on de­posits

Or­di­nance al­ters busi­nesses to pay salaries by cheque and e-pay­ment

Hindustan Times ST (Mumbai) - HT Navi Mumbai Live - - FRONT PAGE - HT Cor­re­spon­dents let­[email protected]­dus­tan­times.com

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.

SAN­JEEV VERMA / HT

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