To prevent possible money laundering through the newly-opened Jan Dhan accounts, the Reserve Bank of India (RBI) on Wednesday put restrictions on withdrawal of money from the Rs 2,568 lakh Jan Dhan accounts. A fully know-your-customer (KYC) compliant customer was only allowed to withdraw Rs 10,000 from such accounts in a month and if the account is only partially KYC-compliant, then the account holder could only withdraw Rs 5,000.

There is a possibility of the entire Rs 14.5 crore of currencies in circulation in Rs 1,000 and Rs 500 banknotes coming back to the banking system by December-end, the deadline for depositing the old currency notes at banks. This is also forcing government to take steps to halt the money launderers.While in a normal savings bank account, the weekly withdrawal limits is fixed at Rs 24,000, which adds up to Rs 96,000 a month, a Jan Dhan account holder can withdraw only Rs 10,000 or Rs 5,000 a month depending on the authenticity of his documents. The account holder can withdraw a higher limit at the discretion of the bank officer.

RBI said this is done to protect the innocent people from money launderers. In a release RBI said, the restrictions were imposed “to protect the innocent farmers and rural account holders of PMJDY from activities of money launders and legal consequences under the Benami Property Transaction & Money Laundering laws, it has been decided to place certain limits, as a matter of precaution, on the operations in the PMJDY accounts funded through deposits of Specified Bank Notes (SBNs) after November 9. As a temporary measure, the banks are advised to observe the following in respect of the PMJDY accounts.”

A senior banker said, “This is discriminatory and leaves the Jan Dhan account holders at the mercy of the bank officers who can decide on whether he can withdraw a higher amount of cash. But unlike the popular perception majority of the Jan Dhan accounts are in the urban centres. But whatever your withdrawal limits cash is in very short supply.”

However, these restrictions can become serious impediments for people in the rural areas specially in the rural areas where money is required for rabi crop. Farmers who kept money for the sowing season now need to deposit the money into the account and then they are restricted in withdrawing the money.

Prime Minister Narendra Modi had launched the Jan Dhan accounts with much fanfare in 2014 putting stiff targets for bank to get large number of unbanked sections particularly in the rural areas. But the programme had a Rs5000 overdraft facility which people thought would be money they would get free of cost if they maintain the account for 6 months. So there was a lot of duplication in accounts with a single person having multiple accounts in various banks.

According to data available on the PMJDY website, as on 23 November, there are 256.8 million bank accounts under the scheme which was introduced in August 2014 as part of a financial inclusion drive launched by Prime Minister Narendra Modi. Among these, nearly Rs 1,000 lakh accounts, or 39%, have been opened in urban areas.