Despite Rs 4000-cap on money exchange, loophole allows multiple transactions
The government announced a Rs 4,000-cap on exchanging demonetised 500 and 1000 rupee notes for valid money till November 24 , but citizens are managing to make multiple such transactions.
With no specific directions on whether the cap was meant as a daily limit, people have been visiting multiple bank branches to exchange their devalued money.
The Reserve Bank of India (RBI) directive stated that exchange of money at banks and post offices could be done by providing a valid identity proof document. The limit of Rs 4000 is in place till November 24, but there isn’t a system to track how many such transactions a person is making. For now, banks are treating the exchange limit as a one-time window.
“At present, the exchange facility is a one-time window and the limit will be reviewed by RBI after 15 days (since implementation). Hence, customers can exchange a total of Rs 4,000 till November 24,” said an ICICI Bank branch manager.
A senior State Bank of India official added, “We cannot track if a person gets it exchanged at another bank. But I guess, the unaccounted wealth that will be exchanged should not be a very large amount during this time period.”
All it takes to make the exchange is a filled-out form and a valid ID card. In case the exchange amount exceeds the Rs 4000 limit, the remaining balance is credited to one’s bank account.
Since Prime Minister Narendra Modi announced the scrapping of Rs 1000 and 500 notes on November 8, people have been making panic runs to banks and ATMs. In some cases, people have used multiple ID proofs at the same branch or post office to exchange their money.
“Today we saw the same person visit us again with a separate ID proof and since we recognized him, we refused to give him further exchange. But it is very difficult to find out otherwise. The idea is that the most urgent needs are met first. Also, for more cash needs, a person can withdraw up to Rs 10,000 per day or use ATMs,” a Canara Bank branch official said.
The Rs 4000-limit is expected to be reviewed on November 23.