Soon, bank transfer may need recipient account holder's approval

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Soon, bank transfer may need recipient account holder's approval

The government wants banks to seek permission from customers before allowing any fund deposit in their accounts. The development comes after Union Finance Minister Nirmala Sitharaman, in her Budget 2019 speech, assured to take steps to empower bank account holders and give them control over cash deposit in their accounts. The move is aimed at curbing instances of illegal deposit of money in bank accounts, including those opened under Pradhan Mantri's Jan Dhan Yojana (PMJDY).

The government has reportedly sought the Reserve Bank of India's view on the matter. Under the proposed mechanism, banks will be required to inform customers before someone tries to deposit money in their accounts, reported Business Standard.

This will not only give people an option of rejecting unknown fund transfer but also help the government to put a stop on illicit deposits. The daily said the government might keep the service paid, so only those willing to pay would be able to avail the facility.

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So far, there is no provision of permission during deposit or fund transfer among bank accounts.

During her Budget speech in Parliament this year, Sitharaman said the Centre was mulling to take certain steps to improve the current situation.

"Government will initiate steps to empower (bank) account holders to remedy the current situation in which they do not have control over the deposit of cash by others in their accounts," Sitharaman had said during the Budget speech.

The issue of illegal money had come to the fore after the Modi government's decision to abruptly ban Rs 500 and Rs 1,000 currency notes in November 2016.

As per reports, after demonetisation, cash totalling Rs 42,200 crore was deposited in 3.74 crore Jan Dhan accounts between November 8, 2016, and December 30, 2016. This had raised doubts of potential misuse of the accounts for converting black money into white, forcing the government to launch a probe in the matter.

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