RBI warns of punitive action for helping others curtail black money

The Reserve Bank of India (RBI) cautioned the public against helping others curtail their black money by depositing or exchanging cash on their behalf.

The central bank, in a note on its website, said, "It is reported that certain gullible persons are exchanging these notes on behalf of other; some are even helping them by depositing the hoarded cash into their own bank accounts. Members of public are cautioned that exchanging /dealing in Specified bank notes in unauthorised manner is illegal and liable to strict punitive action."

The government decommissioned the use of Rs 500 and Rs 1,000 currency notes, effective November 8, in a bid to clampdown on black money and terror finance. Since then, banks and ATMs have been serpentine lines for depositing, exchanging, and withdrawing legal tenders. It is possible to exchange the old Rs 500 and Rs 1000 notes for authorised banknotes till December 30. 

While there are no limits on exchange or depositing cash, the government had forewarned about income tax inquiries if the deposit was over Rs 2.5 lakh. The message has seen people using proxies to deposit their cash or exchange it, to avoid coming under the tax scanner. Even the Jan Dhan bank accounts which had zero of Rs 1 or 2 as balance, have suddenly seen cash deposits to the extent of Rs 49,000, an Economic Times report said. Deposits of Rs 50,000 and above need PAN cards. The RBI said, "Even Pradhan Mantri Jan Dhan Yojana accounts are being put to use for this."