Co-operative banks cannot take deposits

New Delhi January 21: The government has barred co-operative banks from accepting deposits under the Pradhan Mantri Garib Kalyan Yojana, 2016.

This comes in the backdrop of the Income Tax department finding that a number of such banks were suspected of converting black money into white, during the demonetization drive from November 8 to December 30.

"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 (10 of 1949) applies," the finance ministry said in a statement on Friday, while amending the Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016 which was notified by the RBI on December 16.

The deposit under this Scheme shall be made by any person who declared undisclosed income under Pradhan Mantri Garib Kalyan Yojana, 2016. The deposit sum, which shall not be less than twenty-five per cent of the declared undisclosed income.

The finance ministry did not give details on why it amended the rules to prevent cooperative banks from accepting deposits under the scheme. Under the scheme, holders of unaccounted cash willing to avail the offer will have to first pay the tax amount and then fill up a challan form provided by the bank for availing the four-year deposit scheme.

The authorized banks have to electronically furnish the details of deposit to the revenue department on the next working day to enable information verification of the deposit before accepting the declaration under the PMGKY.