The Reserve Bank of India has withdrawn its December 19 circular asking people submitting over Rs 5000 in now defunct 500, 1000 notes in banks to fill up a form explaining why it wasn't done so far.

Buckling under public pressure, the top bank today issued fresh notification recalling its previous circular which means people can deposit more than Rs 5000 in fully KYC compliant accounts.

India Today had highlighted how people were confused and complained of harassment over the RBI's deposit rule. Despite Finance Minister Arun Jaitley's clarification over the previous notification, banks went ahead and questioned people depositing the money.

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HERE'S WHAT YOU NEED TO KNOW:

Old currency notes worth over Rs 5000 can only be deposited once per bank account till December 30, the Reserve Bank of India had said in a notification.

People depositing the old Rs 500 and Rs 1,000 in excess of Rs 5,000 will be questioned in the presence of at least two bank officials why this was not deposited earlier, the RBI said.

WHAT FINANCE MINISTER HAD SAID:

Earlier, Finance Minister Arun Jaitley had said that no questions will be asked if any amount of the junked currency is deposited in one go but repeated deposits may raise queries.

"If they go and deposit with bank any amount of currency no questions are going to be asked to them and therefore the 5000 rupee limit does not apply to them if they go and deposit it once," Jaitley had said.

"But if they are going to go everyday and deposit some currency, same person, that gives rise to suspicion that where is he acquiring this currency from. In that event a person may have something to worry about. Therefore everyone is advised whatever old currency you have please go and deposit it now," the minister added.

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