RBI issued notice banks can’t deny over-the-counter cash deposits

There have been reports that banks are denying over-the-counter cash deposit. The issue has been brought into notice of the Reserve Bank of India (RBI). Looking into the matter the RBI has issued a notice to all the scheduled commercial banks can’t restrict deposit of cash over the counters.

In a note the RBI said that it has been brought into its notice that some banks have introduced certain products, therefore the customers are not being allowed to deposit cash over the counters. “Further, it is also understood that these banks have also incorporated a clause in the terms and conditions that cash deposits, if any, are required to be done through ATMs,” it said.

Since banking is defined as acceptance of deposits of money from the public for the purpose of lending and investment, thus banks cannot introduce any product which is not in tune with the basic doctrine of banking, the RBI said. Adding to this RBI said that including such clauses in terms and conditions which restricts deposit of cash over the counters also amounts to an unfair practice.

The RBI has suggested the banks to make sure that their branches perpetually accept cash over the counters from all their customers who want to deposit cash at the counters. It further added, “they are also advised to refrain from incorporating clauses in the terms and conditions which restricts deposit of cash over the counters.”