RBI closes demonetization deposit window for Indians abroad; NRIs can still queue up

The Reserve Bank of India (RBI) has closed the window to let Indians who were abroad during the 50-day period of demonetization deposit the now-illegal cash. However, non-resident Indians will still be allowed to deposit their money but with a rider.

The RBI disallowed the deposit of the decommissioned Rs 500 and Rs 1000 notes for the general public on December 30, 2016. However, Indians who were abroad from November 8 till the deadline, were allowed to deposit the notes till March 31, including NRIs. While there was no limit on the deposits for Indians who were overseas during demonetization, there was a ceiling on how much cash NRIs could deposit, according to Foreign Exchange Management Act (FEMA).

NRIs will be allowed to deposit the notes with the central bank for three more months, till June 30. However, each individual will only be allowed to deposit a maximum of Rs 25,000, according to FEMA.

While the deposit window for Indians overseas closed on Friday, many were turned away without successfully depositing their cash. Commenting on the chaos at various RBI windows, Minister of State for Finance Arjun Ram Meghwal told the Upper House during the ongoing Budget session "Long queues are formed in Mumbai and Delhi only as a number of persons from the neighbouring states are turning up here. Several staff members have been engaged to attend to the large number of people at the counters."

This comes at a time when the Supreme Court has demanded answers from the government and the central bank as to why the deposit window at the central bank didn't allow people to deposit their decommissioned tenders till March 31, 2017.

A Right to Information (RTI) query filed by an individual also sought an answer to the same question. It inquired why the RBI closed the deposit window as against Prime Minister Narendra Modi's initial announcement that deposits will be allowed till March 31, 2017.

The government on Friday revised the Income Tax rules with a new single-page form, adding that all cash deposits over Rs 2 lakh in cash after November 8 would be looked into. The information will also have to be furnished in the one-page ITR-1 Sahaj form who have income from salary, a house property or earn interest totalling up to Rs 50 lakh.