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India modifies rules once again on cash deposits as deadline looms

The Reserve Bank of India has changed rules once again with regards to its demonetization drive creating further confusion among people. Earlier this week the country's central bank announced a fresh set of restrictions on cash deposits of demonetized notes but as of Wednesday some of these restrictions have been rolled back.

The earlier rules stated that individuals will be able to deposit bank notes above INR 5,000 ($74) only after an explanation to two bank officials as to why this was not deposited earlier. This however led to huge protests against banks and public outcry on social media, following which the Indian central bank decided to roll back the need for explanation.

However, only those accounts that are identified and verified by the banks through an official verification process called 'Know Your Customer' (KYC) will be exempted from the interrogation. Accounts that are not KYC compliant will be subject to explanation on deposits made over INR5,000.


Indians queuing to exchange bank notes after the government introduced demonetization in November, 2016
Indians queuing to exchange bank notes after the government introduced demonetization in November, 2016

On November 8, the Indian Prime Minister Narendra Modi announced the radical step to demonetize the currency notes in order to tackle the rampant problem of the so-called "black money" - billions of dollars' worth of cash in unaccounted wealth and fake currency notes.

The government decided to introduce a new 500 rupee note and also introduce a higher denomination banknote of 2,000 rupees. Old currency notes of 500 and 1,000 rupees can be deposited in the bank until December 30.

However, ever since the announcement on November 8, thousands of people have been waiting outside banks to exchange old currency notes for new ones. While analysts and celebrities across the country have applauded this move, the crowds have been getting more and more restless with every passing day.


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