With a view to protect the innocent farmers and rural account holders of PMJDY (Pradhan Mantri Jan Dhan Yojana) from activities of money launderers, the RBI has decided to place certain limits, as a matter of precaution, on the operations in the PMJDY accounts funded through deposits of Specified Bank Notes (SBNs) after November 9, 2016.
As a temporary measure, the banks are advised to observe the following in respect of the PMJDY accounts:
Fully KYC compliant account holders may be allowed to withdraw Rs 10,000 from
their accounts in a month. The branch managers may allow further withdrawals
beyond Rs 10,000 within the current applicable limits only after ascertaining the
genuineness of such withdrawals and duly documenting the same on bank’s record.
Limited or non-KYC-compliant account holders may be allowed to withdraw ₹5,000
per month from the amount deposited through SBNs after November 9, 2016
within the overall ceiling of Rs 10,000.
Discussing the impact of these limits, Rajnish Kumar, MD, SBI told CNBC-TV18 the Jan Dhan accounts are usually operated through Business Correspondent (BC) channels and normally size of transactions is low at Rs 1,000 to 1,200.
SBI had already put in a restriction of Rs 2,500 on withdrawal from non-KYC-compliant Jan Dhan accounts. So, the impact should be minimal except the change in withdrawal limits, he says.
SBI has so far recalibrated roughly 39,000 of its 48,000 ATMs, he said, adding, the bank is working out strategies to smoothen out the cash circulation to meet pay-day requirements.
Below is the verbatim transcript of Rajnish Kumar’s interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.
Latha: How do you read this withdrawal limits on Jan Dhan Yojana (JDY) accounts of Rs 10,000 a month and beyond that only after checking genuineness. How would you handle this rule?
A: We will handle this rule; there is no problem. We always develop some capability in the system. In fact the way these accounts are operated, most of the accounts are operated through BC channel, what we call business correspondence. The way it was worked out, that BC, they were not drawing too much cash from the banks. They are circulating the cash; people deposit and people withdraw.
Normally the average size of the transactions would be in the range of Rs 1,000-1,200. So, I don’t think that it is going to impact in any manner the cash requirement of the people in the rural areas. However, placing this limit is a good step so that these accounts are not misused. In State Bank of India (SBI) we have taken a precautionary step already.
Sonia: Can you give us some numbers because reports suggest that deposits in the Jan Dhan accounts had surged to almost Rs 30,000 crore between November 10 and November 25, almost 50-60 percent higher than what we saw in the previous 12 months, are these reports accurate and what are the exact numbers about how much money has gotten deposited into Jan Dhan accounts recently?
A: I don’t have the industry level figures. You may have to obtain that figures from Reserve Bank of India (RBI). However, there were some accounts where deposits might have happened, not at the BC level because we have put a restriction of Rs 2,500 either deposit or withdrawal during the day. In a fully know your customer (KYC) compliant account, there is no restriction on deposit. If a person goes to the branch and deposits, it is treated like any other account.
For a non-KYC compliant account, the limit was Rs 49,900-50,000. Rs 50,000 and above you need Permanent Account Number (PAN) and below Rs 50,000 you don’t need a PAN. So, the deposit increase in State Bank of India (SBI) I am told has not been as much in Jan Dhan accounts.
Latha: Would you think that pay day will go on smoothly up until December 1, has the arrival of cash improved?
A: The word 'smoothly', I will not agree but yes, arrangements are in place at all our branches. We have estimated the requirement of cash based on past transactions, some data analytics has gone in. We are issuing tokens also at many branches. So, we are trying to smoothen the process as much as possible.
However, there is a lot of push for digital also, so there may be some problems at some branches even now, forget about the pay day. The problem is not across all branches but certain branches where the transactions are higher, these branches may be impacted but in terms of putting more people on the counters and managing the crowd in an orderly manner, all those steps have been put in place.
Sonia: If you can just quickly tell us how many ATMs have been recalibrated up until now and when will the total process get completed?
A: SBI's last count is about 39,000. Out of 48,000 ATMs, 8,000 are recyclers, there recalibration will happen later because right now they are just accepting deposits; they are working as cash deposit machines and of course Rs 2,000 notes, I think, almost all machines are dispensing.
Latha: Is the government taking cognizance of the unusual swelling of money in the Jan Dhan accounts. Have you all been asked to investigate or at least prevent withdrawal or control withdrawal in accounts that suddenly got a lot of money?
A: The withdrawal limit has come only today. Earlier there was a limited of Rs 24,000 per week, so they were government by that. As I said that the way these accounts operate, they are all through BC channel and in SBI at least we had a daily limit of Rs 2,500 at par with ATMs for deposit and withdrawal. So, we were subject to that weekly limit but now this new limit has come into force, so it will now be subject to these new limits for the month.