Cooperative banks barred from accepting deposits under PMGKY

In yet another measure to add teeth to the recent demonetisation drive aimed against black money, the government on Friday barred cooperative banks from accepting deposits under the new tax amnesty scheme — Pradhan Mantri Garib Kalyan Yojana (PMGKY).

“Application for the deposit in the form of Bonds Ledger Account shall be received by any banking company, other than Co-operative Banks, to which the Banking Regulation Act, 1949, applies,” a finance ministry release said, amending the notification for the Pradhan Mantri Garib Kalyan Deposit Scheme.

Following the demonetisation of high-value currency on November 8, the government announced the PMGKY under which undisclosed income deposited in any bank or post office account can be declared by paying 50% of the amount in taxes and surcharges. Besides, a quarter of the total sum is to be put in a non-interest bearing deposit for four years.

Friday’s amendment comes after Income Tax Department investigations of some coperative banks showed up deposits in excess of the physical holding of the banned Rs 500 and Rs 1,000 notes.

Six days after the demonetisation, the Centre had abruptly overturned its decision to permit note exchanges and disbursing the new currency notes on grounds of alleged money-laundering being carried out by state and district cooperative banks.

In reply to an RTI query in the matter, the Reserve Bank of India has admitted earlier this month that it has no details of any irregularities or scams in the exchange of the demonetised currency notes by the cooperative banks.