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    Note exchange & identity proof: Bankers concerned about ambiguity

    Synopsis

    The Reserve Bank of India (RBI) has said that banks should follow existing guidelines, leaving them to decide their own strategies while accepting ₹2,000 notes for exchange.

    Rs 2000 notes 1280Agencies
    "This could not be a reason for harassing bankers in the future, and we will ensure that," he said.
    New Delhi: Bankers are concerned about possible undue scrutiny because of the ambiguity over the ₹2,000 note exchange process.

    The Reserve Bank of India (RBI) has said that banks should follow existing guidelines, leaving them to decide their own strategies while accepting ₹2,000 notes for exchange.

    In a notification on May 20, State Bank of India stated that "no identity proof is required to be submitted by the tenderer at the time of exchange."

    In contrast, a Punjab National Bank official said that its internal directions require the lender to ask for identity proof in case of currency note exchange.

    Some bankers believe taking deposits without any identity proof can lead to undue trouble.

    "Since no documentation is to be maintained as to who exchanged and how many times, this could cause concern in cases where such a person is later caught in money laundering or other nefarious activities," said a banker.

    Investigating agencies, in such cases, may cause undue harassment to bank officials, he added.

    On Monday, in answer to a question regarding black money coming back to the system, RBI Governor Shaktikanta Das said that there is a set procedure for deposits in bank accounts or for cash exchange.

    "What we have said is that the existing requirement or the existing procedure has to be followed by the banks. We have not come up with an additional procedure," he said. "You must be aware that there's an income tax rule if you deposit cash above ₹50,000, you have to produce your PAN. So existing rules will apply."

    Last Friday, the RBI announced the withdrawal of ₹2,000 notes from circulation, although these will continue to be legal tender. Bank customers can deposit or exchange their ₹2,000 notes until September 30, 2023.

    "The customer can show us the RBI directions, which are ambiguous and can lead to unwarranted situations," an official said, adding that even during demonetisation in 2016, bankers were in the line of fire.

    According to CH Venkatachalam, general secretary of the All India Bank Employees' Association, the directions are clear that no KYC documents are required to exchange the ₹2,000 currency note.

    "This could not be a reason for harassing bankers in the future, and we will ensure that," he said.




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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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