Banks failing to honour PMGKY amnesty scheme warned

In a move to increase deposits under the amnesty scheme of Pradhan Mantri Garib Kalyan Yojana, the government has warned banks they will be penalised if they fail to accept taxes under the scheme. Such banks will have to face 'de-authorisation' of branches, said the finance ministry.

In a letter to the heads of banks authorised to accept deposits under the scheme, the ministry said that branches should be informed of the decision, and asked them to make technical arrangements in respect of software, etc for accepting payments.

This direction comes in the wake of complaints that some banks were not accepting payments. It was found that many were not aware of the procedure and were refusing acceptance citing technical reasons.

The matter was then referred to the Principal Chief Controller of Accounts who has now issued a warning to the banks.

The provision was created after the demonetisation move when the government found that people were resorting to illegal ways to convert their black money into white.

Under the PMGKY provision, until 31 March, those who have unaccounted money can declare their assets in the form of bank deposits by paying a tax of 50 per cent of the deposit. Additionally, a 25 per cent of the sum will have to be locked in a deposit for a period of years, without it qualifying for any interest on the deposit.

If a person is caught by tax officials for hoarding money, then the tax payable would be 85 per cent, the government had said.

With a month to go for the deadline, the ministry has taken cognizance of non-compliance of this provision on part of banks.