1,000 'high-velocity' current accounts shortlisted. |
The government plans to track cash transactions in 1,000 "high velocity" bank accounts across the country. At a meeting with a few top-notch bankers last week, finance ministry officials said the purpose was to study the need for high cash withdrawals on a regular basis and not to harass these current account holders. |
|
Finance ministry sources told Business Standard that it would select these 1,000 accounts on the basis of the amount of cash withdrawals. |
|
The Budget for 2005-06 had imposed a 0.1 per cent tax (that is Rs 10 per Rs 1,000) on all current account withdrawals of Rs 25,000 by individuals and over Rs 100,000 by companies from June 1. |
|
"Since banks will have to collect the 0.1 per cent tax on cash withdrawals and will now keep a regular tab on these transactions, it will be easier for the ministry to get the required data," the sources said. |
|
All scheduled commercial banks will be required to file an annual statement to the government on the collection of withdrawal tax. |
|
Besides, they are required to file a quarterly statement on all high-value cash transactions to the finance ministry. The central office of banks will pull in data from all branches and a soft copy will be sent to the government. |
|
Customers of non-scheduled banks will not be required to pay the cash withdrawal tax. Sources said if customers shifted from scheduled banks to non-scheduled ones to avoid paying the tax, the government might bring non-scheduled banks, too, under the tax ambit in future. |
|
Under Section 2 of the RBI Act, scheduled banks -- which need to have at least Rs 50 crore net worth -- get refinance facility from the RBI. Non-scheduled banks do not enjoy this facility. |
|