RBI puts restriction on cash payment for marriage expenses

KOLKATA: Reserve Bank of India has put a spanner on cash payment to meet marriage expenses even as it has finally notified the cash withdrawal relief up to Rs 2.5 lakh for this purpose.

RBI said cash withdrawals can be made by either of the parents or the bride or the groom but most importantly, they have to provide the full list of likely recipients of the cash payment along with a declaration from such persons that they do not have bank accounts.

That means, by all practical purposes, cheque payment or online bank transfer becomes mandatory to people having bank accounts for all likely expenses -- small or big -- to be made for marriages on or before December 30.

"With a view to enable members of the public to perform and celebrate weddings of their wards it has been decided to allow higher limits of cash withdrawals from their bank deposit accounts to meet wedding related expenses," RBI said Monday.

But here goes the tricky part. "Since the amount proposed to be withdrawn is meant to be used for cash disbursements, it has to be established that the persons for whom the payment is proposed to be made do not have a bank account.

RBI said that public should be advised, while granting cash withdrawals, to use cash to meet expenses which have to be met only through cash mode.

The regulator also advised bank officials to encourage people to incur wedding expenses through non-cash means such as cheques or drafts, credit/debit cards, prepaid cards, mobile transfers or internet banking.

RBI said a maximum of Rs 2.5 lakh can be withdrawn till December 30 if and only if the deposit holder had the required balance in his or her account on November 8, on the day when Prime Minister Narendra Modi announced the cash-replacement scheme.