The move is a follow-up to instances of illicit deposits — after demonetisaton — in bank accounts opened under the Pradhan Mantri Jan-Dhan Yojana (PMJDY).
Under the proposed mechanism, the finance
ministry has said banks
will notify customers when someone tries to deposit money in their accounts, a government official said.
However, this service may not be open to all customers because they may be required to pay for availing of this service, according to a proposal being discussed between the regulator and the government, the official added.
The move is a follow-up to the announcement made by Finance
Minister Nirmala Sitharaman in the Union Budget 2019-20.
“Government will initiate steps to empower (bank) account holders to remedy the current situation in which they do not have control over deposit of cash by others in their accounts,” Sitharaman had said during the Budget speech.
At present, the recipient’s permission is not required during fund transfers between bank accounts or even during cash deposits made in a bank account.
A depositor needs the bank account number and IFSC [Indian Financial System Code] of the recipient’s bank to initiate transfers of funds through the Immediate Payment Services (IMPS), National Electronic Funds Transfer (NEFT), or Real Time Gross Settlement (RTGS).
The government had launched a probe into these deposits, which accounted for 60 per cent of the money in Jan Dhan accounts during that period.