March 13, 2017

The Reserve Bank of India on Monday lifted the limit on cash withdrawals from banks and ATMs. Earlier on November 8, last year, Prime Minister Narendra Modi had announced the much talked about demonetisation drive, banning the use of high denomination currencies i.e, Rs 500 and Rs 1000 notes. This a created a vacuum in the Indian economy as the replenishment could not be done immediately. The RBI had then issued a limit on the cash withdrawals from banks and ATMs to stabilise the flow of currencies. On February 20, the Reserve Bank on had said that the weekly limit on withdrawal of cash from savings bank accounts would be increased to Rs 50,000, from the current Rs 24,000.

“The limits on cash withdrawal from savings bank accounts continue to be in place. In line with the pace of remonetisation, it has now been decided to remove these limits in two stages,” said RBI Deputy Governor R Gandhi. He was speaking to the media, along with RBI Governor Urjit Patel, after the central bank announced the sixth bi-monthly monetary policy review. On the basis of remonetisation, RBI had earlier relaxed restrictions on cash withdrawal from current accounts, cash credit accounts and withdrawal through ATMs on 1 February. However, the weekly withdrawal limit of Rs 24,000 on savings bank accounts is continuing.

Government and RBI had imposed limits on withdrawal of money from ATMs and bank branches in view of the currency shortage following demonetisation. These limits, however, were being gradually eased, with RBI pumping in new notes of Rs 500 and Rs 2,000. To a question, if fake new currency notes of Rs 500 and Rs 2,000 have come into circulation, Gandhi had said the recent ones that have come to notice are photocopies of currency which can be easily identified by the common man. The deputy governor had said the new notes have enhanced security and design features, and are not easy to copy. “The recent one that we have seen is the pure photocopy, so it is not real counterfeiting. So, this photocopy is easy for even a common man to identify. It will be possible for them not to be easily duped,” he said.

[The Financial Express]