RBI releases guidelines for drawing Rs.2.5L for weddings
What's the story
The Reserve Bank of India has issued a circular letting withdraw Rs.2.5 lakh for weddings. According to the central bank, only one person from a family with an upcoming wedding on or before 30 December 2016 can withdraw the money. However, there is a catch; money can be withdrawn only from the credit balance as on 8 November 2016, when demonetization was announced.
17 Nov 2016
Govt's relief measures for families celebrating weddings
To balance out demonetizing Rs.500 and Rs.1000 currency notes - what is being termed as a poorly thought-out decision - the government announced relief measures for farmers and families celebrating weddings. The Economic Affairs Secretary Shaktikanta Das stated, for wedding ceremonies, families can draw up to Rs.2.5 lakh from their bank accounts that are 'Know Your Customer' compliant.
Information
Peak wedding season
The move came as a relief for many during the peak wedding season as those organizing weddings were in a fix while paying vendors involved in ceremonies. Guests at several places have reportedly presented the newlyweds with cheques and IOU (I Owe You) envelopes.
Information
Know Your Customer compliant accounts
The central bank reiterated that the account holder who desires to withdraw money under this facility must be fully KYC (know your customer) norm compliant. Banks will be required to record evidence and produce them for verification if needed.
Documents
Wedding invitation cards, payments receipts required to avail the facility
An applicant would be required to show a wedding invitation card, receipts of advance payments to marriage halls, caterers, etc. The bank manager would need to retain copies of all submitted documents for scrutiny. Though the government had announced its decision about the withdrawal of Rs.2.5 lakh for weddings, the banks were not able to disburse funds due to lack of operational guidelines.
Applications
Only one person per family can withdraw money
The application for withdrawal should provide the names of bride and groom, proof of their identities, addresses, date of marriage, etc. One person per family (either of the parents/the person getting married) can withdraw; they must sign self-declaration statement saying money would be taken only from one account. Payment receivers (caterers, venues, etc.) cannot have bank accounts since the facility is for cash disbursements.
Requirements
Payment receivers must declare they don't have a bank account
Apart from other documents, a detailed list of people the withdrawn cash is proposed to be paid must be submitted to the bank. People receiving payments need to declare they don't hold bank accounts; the purpose of payment must be mentioned. The documents could be used for verification if required; "the scheme would be based on authenticity or bona fide use thereof," RBI said.
Quote
RBI's statement
"A detailed list of persons to whom the cash withdrawn is proposed to be paid, together with a declaration from such persons that they do not have a bank account. The list should indicate the purpose for which the proposed payments are being made."