Knotty affair to tie knot - Wedding cash comes with riders, payment can be made only to those without account

TT, Nov. 21: Stringent conditions have been put in place for withdrawing the maximum permissible Rs 2.5 lakh from banks for wedding expenses.

♦ The sum of Rs 2.5 lakh can be withdrawn only out of the balance that was in the account at the close of business hours on November 8, the day the Prime Minister announced the demonetisation decision, according to a notification the RBI issued this evening.

For instance, if a person had withdrawn Rs 5 lakh in old notes from an account with a total amount of Rs 6 lakh a few days before November 8, he or she can deposit the cash back but cannot withdraw Rs 2.5 lakh now. The customer can only withdraw Rs 1 lakh or less, the balance that had remained in the account on the cut-off date of November 8, for the wedding expenses. The withdrawal limit for other purposes is Rs 24,000 a week.

♦ The cash withdrawn can only be paid to those without a bank account. "Since the amount proposed to be withdrawn is meant for cash disbursements, it has to be established that the persons for whom the payment is proposed to be made do not have a bank account," the RBI statement said.

The application for the withdrawal should be accompanied by a "detailed list of persons to whom the cash withdrawn is proposed to be paid, together with a declaration from such persons that they do not have a bank account. The list should indicate the purpose for which the proposed payments are being made", the apex bank said.

♦ The amount can be withdrawn only if the date of marriage is on or before December 30, 2016.

♦ Withdrawals are permitted only from accounts that are fully KYC (know your customer) compliant.

♦ Withdrawals can be made by either of the parents or the person getting married.

♦ The application should be in a prescribed format and accompanied by documents on "evidence of the wedding, including the invitation cards, copies of receipts for advance payments already made, such as marriage hall booking, advance payments to caterers etc", the RBI said.

When the government had first announced the "relief" on Thursday, no mention was made of the cut-off date of November 8 and that payments from the cash withdrawn could be made only to those without bank accounts.

However, banks had been refusing to entertain such withdrawal requests till this evening, saying they were waiting for the formal notification. The fine print in the notification makes it clear why the banks have been so cautious.

The RBI notification makes it clear that the authorities want to stamp out high-value cash transactions. It says: "Banks should encourage families to incur wedding expenses through non-cash means viz. cheques /drafts, credit/debit cards, prepaid cards, mobile transfers, internet banking channels, NEFT/RTGS, etc."

Dyuti Saraf, a Calcuttan who is getting married this Friday, was startled when she heard about the regulations. "I am going to have a destination wedding at Puri. I have several vendors out of Calcutta as well. How can I prove that none of them has a bank account?" said Dyuti.

Diptosh Chatterjee, a Hazra resident, is scheduled to get married in December. He wanted to withdraw Rs 2.5 lakh on Monday but was told that he could withdraw only Rs 24,000, the maximum weekly limit, as the bank had not got any official communication.

Told about the conditions tonight, Chatterjee was incredulous: "Why should I be bothered about the bank details of my fish supplier? What if he has a bank account but would prefer cash?"

Abir Majumdar, a marketing professional, is going to get married in February but has a series of payments lined up this month. His father had saved Rs 1 lakh in Rs 500 and Rs 1,000 notes and kept the money in their home. He had planned to deposit the amount after the queues shrank a little and then withdraw it, Majumdar said. Now, the plans have gone awry.

A Calcutta caterer who has four wedding assignments over the next few days was at a loss on how to cope with the cash crunch after the fresh notification.

He was expecting cash advances from several other clients whose weddings are slated later to tide himself over the crisis but the notice has put paid to that. He has enough cash in his account but cannot withdraw.

"I have orders for four weddings over the next week. All the four customers have made advance payments in cheque or transferred money through Internet banking but I cannot withdraw more than Rs 50,000 from the current account in a week. How will I manage four weddings with only Rs 50,000 cash in a week?" asked the caterer.

"Why will I give a false declaration that I have no bank account? But I need cash to buy stuff. Some sweet shops do not accept card payments. Fish sellers, vegetable vendors, meat shops - everyone is demanding cash," he added.

Another caterer said he had had to stop payments to workers like cooks, helps and waiters who are paid per day and in cash. "If I don't have enough in hand, how do I pay them? Most of these people don't have accounts."