The Reserve Bank of India’s latest restriction on deposits over Rs 5,000 in old currency notes has saddled bankers with more work, apart from also having to face irate customers asking them for explanations as to why they couldn’t come earlier.
The new norms which came into force on December 20, stipulate that deposits above Rs 5,000 in value will require explanation and customers are subject to questioning. Such deposits can also be made only once per account, until December 30, the deadline for the demonetisation exercise to end.
Bank officials say this has increased their work with more time now needed for each customer and has delayed servicing thus leading to longer queues and public outrage.
“The constantly changing rules are difficult to process in our core banking system as it requires making changes across all branches. It is a huge loss of business and time for us,” said a senior executive with a private bank. “Customers have also postponed high-priced purchases waiting for this uncertainty to end,” he added.
The biggest negative is the fact that depositors will now also have to explain to at least two bank officials why they couldn’t deposit earlier.
“Tenders of SBNs (specified bank notes of Rs 500 and Rs 1,000) in excess of Rs 5,000 into a bank account will be received for credit only once during the remaining period till December 30, 2016…The credit in such cases shall be afforded only after questioning (the) tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation,” the RBI circular said.
A branch official at a State Bank of India branch in Mumbai said, “It is difficult to judge a “satisfactory explanation”. Customers give reasons such as waiting for queues to reduce, being out of town or not being well. We cannot harass them as there is no requirement of proof for their explanations.”
Since November 8 when Prime Minister Narendra Modi announced demonetization, rules on deposits and withdrawals have been changed frequently, sometimes as often as on alternate days making it difficult for both banks and customers to cope with an ever changing landscape.
A senior large public sector bank official said, “We have to go through the pain as we are dictated by the government and the customers. We are becoming the pawns between them and have no option but to bear the brunt on both sides.”
A customer at a bank in Borivali, Mumbai said, “I have been waiting for the queues to subside. Also, didn’t the government tell us to not rush to branches as there is time till December 30? This is unfair.”