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India’s central bank limits withdrawals from Jan Dhan accounts

With regard to deposits, Jan Dhan account holders have a limit of Rs50,000

Gulf News

Mumbai: To check the misuse of Jan Dhan accounts by black money hoarders, Reserve Bank has restricted the withdrawal from such accounts to Rs10,000 (Dh536) per month.

“With a view to protect the innocent farmers and rural account holders of PMJDY from activities of money launders and legal consequences under the Benami Property Transaction & Money Laundering laws, it has been decided to place certain limits, as a matter of precaution, on the operations in such accounts funded through deposits of Specified Bank Notes after November 9, 2016,” the RBI today said in a notification, terming it as temporary measures.

According to authorities, fully KYC-compliant Jan Dhan account holders will be allowed to withdraw Rs10,000 per month from their account, while limited or Non KYC compliant account holders can withdraw Rs5,000 per month.

It, however, said branch managers may allow further withdrawals beyond Rs10,000 a month within the current applicable limits only after ascertaining the genuineness of such withdrawals and duly documenting the same on bank’s record.

With regard to deposits, Jan Dhan account holders have a limit of Rs50,000.

In the wake of the Centre’s demonetisation drive, Jan Dhan accounts have seen a massive rise in deposits, in many cases to the extent of Rs49,000. There have been reports that the bank accounts of people, mainly in rural areas, who had zero balance till the announcement of scrapping of high value currency notes, have been witnessing sudden surge in deposits.

The government suspects that black money hoarders are using the farmers and other people’s Jan Dhan accounts to deposit their ill-gotten money so that they can safely convert that money into white.

Deposits in Jan Dhan accounts soared sharply by around Rs272 billion in just 14 days after the announcement of ban on old Rs500 and Rs1000 currency notes. Total deposits in 256.8 million Jan Dhan accounts crossed Rs700 billion mark and were at Rs728.34 billion on November 23.

As of November 9, total deposits in these accounts were Rs456.36 billion.

After the surprise demonetisation of Rs500 and Rs1,000 notes announced by Prime Minister Narendra Modi on November 8, deposits in Jan Dhan accounts have increased sharply.

However, 22.94 per cent of 256.8 million accounts still have zero balance.