Cooperative Banks Are Allowed to Deposit Demonetized Notes with RBI

In a significant move, Government of India allowed the RBI to accept demonetized notes of Rs 500 and Rs 1,000 received by the District Central Cooperative Banks (DCCBs) during November 10-14 2016.

The notification says that the DCCBs can deposit the demonetised notes, collected during the five-day period after demonetisation was announced on November 8, 2016, with the Reserve Bank of India for 30 days from Tuesday. The DCCBs had been disallowed from accepting the notes after November 14.

It also allows banks and post offices which had collected demonetised notes prior to December 30, 2016 to deposit them with the RBI.

The deposits can be made under Specified Bank Notes (Deposits by Banks, Post Offices and District Central Cooperative Banks) Rules, 2017.

Officials said that the deposits would be taken in pursuance to an assurance given to the Supreme Court by the government that proper verification of each account would be done before any decision is taken.

Such a verification was done between January and May this year and it was found that the accounts complied with the KYC norms.

Last week, Maharashtra Minister Dilip Raote had demanded that the government should allow the RBI to accept the Rs 2,271 crores lying with the DCCBs.

The gazette notification comes on a day when the Shiv Sena announced endorsement of NDA Presidential candidate Ram Nath Kovind, after the party had last week demanded that the over Rs 2,270 crore lying with the DCCBs be accepted by the Reserve Bank of India (RBI).