Banks have become stricter with high-value cash transactions, and ₹2,00,000 has emerged as a key limit that triggers extra checks. Understanding how this amount is treated by major public sector banks like SBI, PNB, and BOB is important to avoid penalties or account restrictions.
Why ₹2,00,000 Matters
Any cash transaction of ₹2,00,000 or above—either as a single deposit, withdrawal, or combined in one day—is flagged for verification. Banks treat it as a high-value amount that may require identity proof, source of funds, and a valid reason. The goal is to prevent misuse, tax evasion, or money laundering.
KYC and PAN Rules
To perform large transactions, your KYC must be fully updated. This includes valid identity proof, address proof, and a recent photograph. Accounts with outdated or incomplete KYC may be restricted from withdrawals or deposits until updated.
For any cash transaction of ₹50,000 or more, quoting your PAN is mandatory. If you do not have a PAN, you must fill out Form 60, declaring that you do not possess one. However, using Form 60 repeatedly for large cash transactions can invite further scrutiny. Linking PAN and Aadhaar with your account ensures smoother processing and compliance.
Cash Deposit and Withdrawal Rules
When depositing ₹2,00,000 or more in cash, banks will ask for your PAN and may also request a written declaration about the source of funds. Branch officials might question the purpose if the amount does not match your usual account activity.
For large withdrawals, banks often recommend prior notice. Some branches require you to inform them before taking out large sums, especially when cash availability is limited. You may also be asked to explain the purpose of withdrawal if it appears inconsistent with your account history.
Digital Transaction Limits
For online transfers, NEFT has no upper limit, but transactions are monitored for unusual activity. RTGS is meant for large transfers, with ₹2,00,000 as the minimum amount. UPI payments usually have limits between ₹1 lakh and ₹2 lakh per day, depending on your bank and account type. These electronic modes are safer, faster, and easier to track than cash dealings.
Penalties and Account Restrictions
If KYC is incomplete, banks can temporarily freeze your account until verification is completed. Some banks issue reminders first, while others restrict access immediately after deadlines pass.
Depositing large sums without proper documentation may draw attention from tax authorities. Under income-tax laws, unexplained or unreported cash transactions can attract a 100 percent penalty, plus additional tax and interest. Repeated large transactions that do not match your income profile may also be reported to monitoring agencies.
Reporting and Oversight
Banks must monitor high-value accounts and report suspicious activity to regulatory bodies. Even if your transactions are genuine, unexplained large deposits or frequent cash movements can be flagged for review. Maintaining records such as invoices or receipts helps you justify the source of funds if required later.
What Has Changed
Banks have tightened their verification systems. Now, even transactions below the official government reporting thresholds can be internally flagged. Accounts that remain inactive or partially verified are at higher risk of temporary freezing. The emphasis has shifted toward encouraging digital transfers rather than large cash dealings, aligning with the move toward a more transparent banking ecosystem.
What You Should Do
Keep your KYC updated with current ID and address proof. Always use your PAN for transactions of ₹50,000 or above. If you plan to deposit or withdraw ₹2,00,000 or more, inform the branch in advance and carry necessary documents. Prefer online transfers whenever possible, and keep a record of receipts or bills for large transactions. Regularly check your messages and email for any KYC or compliance notices from the bank.
Final Advice
If you maintain clear records and keep your KYC and PAN in order, handling ₹2,00,000 or higher transactions in SBI, PNB, or BOB will be smooth. The key is transparency—make sure your banking activity reflects your income pattern, and respond promptly to any communication from your bank. Following these simple steps will help you avoid penalties and ensure that your account remains fully operational.
