Cap on cash that can be held by individuals and companies may be round the corner
MUMBAI: Even as the top private banks announced their decision to charge Rs 150 for cash deposits and withdrawals after four free transactions per month, a slew of additional measures from the government may just be round the corner.
In the government's determined push against the parallel economy, the next step could be a cap on the cash amounts that can be held by individuals and companies, people in the know said.
The steps could be on the lines of Special Investigation Team (SIT) recommendations. The Supreme Court-constituted SIT in July last year had recommended a cap of Rs 3 lakh on cash transactions and Rs 15 lakh on cash holdings.
The government in the budget has already implemented one of the SIT recommendations. “No transactions above Rs 3 lakh should be permitted in cash. The government has decided to accept this suggestion,” Finance Minister Arun Jaitley had said in his budget speech. The government will be required to make this change through the finance bill. But Jaitley did not say whether the government intends to accept the SIT’s other suggestion—a cap on cash holding of Rs 15 lakh.
ET was first to report about such a change on November 18 and said the government could be looking to introduce such a step in the budget.
Experts say that such a step could mean that the war on black money will open up another flank and combined with GST, such a proposal could go a long way.
HDFC, ICICI and Axis on Wednesday said that they would charge Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month. It is expected that other public sector banks may just follow the lead and announce similar charges going ahead. The step, say experts, is towards reducing cash transactions.
In the government's determined push against the parallel economy, the next step could be a cap on the cash amounts that can be held by individuals and companies, people in the know said.
The steps could be on the lines of Special Investigation Team (SIT) recommendations. The Supreme Court-constituted SIT in July last year had recommended a cap of Rs 3 lakh on cash transactions and Rs 15 lakh on cash holdings.
The government in the budget has already implemented one of the SIT recommendations. “No transactions above Rs 3 lakh should be permitted in cash. The government has decided to accept this suggestion,” Finance Minister Arun Jaitley had said in his budget speech. The government will be required to make this change through the finance bill. But Jaitley did not say whether the government intends to accept the SIT’s other suggestion—a cap on cash holding of Rs 15 lakh.
ET was first to report about such a change on November 18 and said the government could be looking to introduce such a step in the budget.
Experts say that such a step could mean that the war on black money will open up another flank and combined with GST, such a proposal could go a long way.
HDFC, ICICI and Axis on Wednesday said that they would charge Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month. It is expected that other public sector banks may just follow the lead and announce similar charges going ahead. The step, say experts, is towards reducing cash transactions.
