RBI eases rules for wedding withdrawal; banks to provide funds to co-ops

RBI doubled the limit to Rs 20,000 for semi-close pre-paid instruments with a view to meeting the transnational needs of the public through digital means.

By: PTI | Mumbai | Updated: November 22, 2016 10:17 pm
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In a marginal relief to wedding families, RBI on Tuesday relaxed one of several conditions for withdrawal of Rs 2.5 lakh from their own accounts by making declaration for payments beyond Rs 10,000 only. Earlier, the drawee had to declare all payments he had to make out of the Rs 2.5 lakh withdrawal from the account. Also, RBI asked banks to ensure adequate funds are provided to rural cooperative banks for disbursal to farmers so that they can have enough valid notes for purchase of seeds, fertiliser and other inputs during the ongoing rabi season.

The RBI also doubled the limit to Rs 20,000 for semi-close pre-paid instruments with a view to meeting the transnational needs of the public through digital means. “A detailed list of persons to whom the cash withdrawn is proposed to be paid, together with a declaration from such persons that they do not have a bank account, where the amount proposed to be paid is Rs 10,000 or more. The list should indicate the purpose for which the proposed payments are being made,” RBI said in a notification.

“It is estimated that about Rs 35,000 crore would be required by DCCBs (District Co-operative Banks) for sanction and disbursement of crop loans to farmers at the rate of Rs 10,000 crore per week,” an RBI notification said. National Bank for Agriculture and Rural Development (Nabard) will be utilising its own cash credit limits up to
about Rs 23,000 crore to enable the DCCBs to disburse the required crop loans to Primary Agricultural Credit Society (PACS) and farmers, it said.

“As many of these loans will be disbursed in cash to facilitate farming related expenses, we advise in this regard that banks with currency chests should ensure adequate cash supply to the DCCBs and RRBs,” it said. The decision comes a day after Finance Minister Arun Jaitley had a meeting with RBI, Nabard and all bankers and
impressed upon them to make available funds to the cooperative sector as it is an important financing mechanism for rural India.

On Monday, the Reserve Bank of India issued detailed operating guidelines for banks for dealing with special dispensation for wedding, a move which was announced by the government four days ago. Withdrawals were allowed only from balance available before November 8 decision of the government to demonetise 500 and 1,000 currency notes and the same can be done only for marriages solemnised on or before December 30.