Is keeping cash at home a crime now? That's the question that the Karnataka High Court recently asked the Central Bureau of Investigation (CBI) while hearing a case against a contractor found in possession of ₹4.8 crores in new currency notes.
But while even CBI agreed that "possessing cash in hand in itself is not an offence,'' it proceeded to prosecute the contractor charging him with conspiracy for an alleged illegal exchange while agreeing to the court's demand to not arrest the contractor. A similar case had been presented to a CBI special court against another individual Nazeer Ahmed, accused of criminal conspiracy, cheating, criminal breach of trust, forgery, and corruption, following a raid by the Income Tax department, which allegedly found ₹32.7 lakhs in ₹2,000 notes in Ahmed's possession, the Indian Express reported. Ahmed was later granted bail in view of his poor health.
On Monday, in yet another notification, the Reserve Bank of India (RBI) said all deposits over ₹5,000 in old money will invite questioning in the presence of two bank officials, and a detailed explanation why the notes weren't deposited earlier. That drastic directive is in stark contrast to what the government, had in fact, urged the public to do in the immediate aftermath of the demonetisation move, assuring everyone had 50 days to deposit their money, and to not rush to banks that were thronged by people.
That directive is in stark contrast to what the government, in fact, urged the public to do in the immediate aftermath of the demonetisation move
While there seems little doubt that keeping cash in hand, isn't itself a crime, but if you go by the Reserve Bank's directive to restrict deposits up to ₹5,000 and the government's complete U-turn on depositing old notes within the promised 50-day window by Prime Minister Narendra Modi, it's clear that keeping cash-–earned or acquired through even legal means-–is now seen as suspicious and the person holding that money a potential criminal.
Perhaps sensing the unease the move would cause, Finance Minister Jaitley, in direct contradiction with RBI's directive, quickly assured the public that ₹5,000 rupee limit won't apply if you are making a one-time deposit, saying that repeat deposits "gives rise to suspicion" where the person got the currency from.
Even if one assumes that the government and RBI aren't communicating as well as they should, the hurried clarification unabashedly flies in the face of all fairness and legal provisions that the government is supposed to uphold and protect--primarily the maxim that everyone is to be presumed innocent until proven guilty. And certainly not treated like a crime suspect.
Given that the overwhelming majority of transactions in India are still done in cash, it's ludicrous to assume that people would not have kept part of their wealth in cash. These could range from cash gifts, to emergency stash, a portion of salaries, savings, or wages earned by or paid to workers in the informal sector.
The serpentine lines and the rush at banks is another big factor why people may have chosen to delay their decision to deposit their old notes. This also doesn't take into account the millions of others who don't have bank accounts or haven't had the chance to open one given the ongoing rush at banks. Many banks have put off non-transaction services like lending as their staff is mainly focused on currency exchange.
But most importantly, people may have chosen to keep cash because of that piece of paper called the Indian rupee, which carries in bold lettering the explicit guarantee by the governor of the Reserve Bank Of India: "I promise to pay the bearer the sum of ..."
But most importantly, people may have chosen to keep cash due to their faith in the explicit guarantee by the governor of the Reserve Bank Of India on every bank note: "I promise to pay the bearer the sum of ..."
But these draconian new restrictions and serious backflips and public assurances by the government only work to dangerously undermine the credibility and trust in India's central bank and our national currency that the RBI should fiercely work to protect.Suggest a correction