RBI puts restriction on cash payment for marriage expenses

Banks have also been asked to keep records of all disbursals and drawers will have to submit a list person to whom payments will be made out of the funds

Wedding card, copies of advance payments made for booking marriage hall and caterers will be required for withdrawing Rs 2.5 lakh from own accounts, as per stringent conditions imposed by the Reserve Bank of India on either of the parents to meet wedding expenses.

Four days after the government announced special dispensation for meeting wedding expenses, RBI, on Monday, issued detailed operating guidelines for banks for dealing with such requests.

Withdrawals will be allowed only from balance available before November 8 decision of the government to demonetise Rs 500 and Rs 1,000 currency notes and the same can be done only for marriages solemnised on or before December 30.

Banks have also been asked to keep records of all disbursals and drawers will have to submit a list person to whom payments will be made out of the funds.

The special dispensation was given to ease the cash crunch faced during the ongoing wedding season due to imposition of cash withdrawal restrictions on all bank accounts in the aftermath of the demonetisation decision.

Restrictions were placed as banks are grappling with cash shortage.

"Withdrawals can be made by either of the parents or the person getting married. (Only one of them will be permitted to withdraw)," the notification said.

Further, there should be "a detailed list of persons to whom the cash withdrawn is proposed to be paid, together with a declaration from such persons that they do not have a bank account.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".

RBI also said banks should encourage families to incur wedding expenses through non-cash means through cheques or drafts, credit or debit cards, pre-paid cards, mobile transfers, Internet banking channels, NEFT/RTGS and the like.

"Therefore, members of the public should be advised, while granting cash withdrawals, to use cash to meet expenses which have to be met only through cash mode," RBI told banks.

Banks have been asked to keep a proper record of the evidence and produce them for verification by the authorities in case of need.

The scheme will be reviewed based on authenticity or bona fide use thereof, RBI added.

Photograph: Reuters