To encourage people to deposit valid currency notes in banks, RBI on Monday said bank customers would be able to withdraw deposits made in current legal tender notes beyond the current limits, a move aimed at increasing currency circulation in system. For example, if someone deposits valid legal tenders (Rs 2,000, Rs 500, Rs 100, Rs 50, Rs 20, Rs 10, Rs 5) of Rs 4,000, the withdrawal limit for that person would rise by Rs 4,000 over and above weekly withdrawal limit of Rs 24,000.
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For current accounts, the withdrawal limit is Rs 50,000 a week for small traders. In a late evening circular, the Reserve Bank said that it has been reported that “certain depositors are hesitating” to deposit their monies into bank accounts in view of the current limits on cash withdrawals from accounts.
“As it is impeding active circulation of currency notes, it has been decided, on careful consideration, to allow withdrawals of deposits made in current legal tender notes on or after November 29, 2016 beyond the current limits; Preferably, available higher denominations bank notes of Rs 2000 and Rs 500 are to be issued for such withdrawals,” the Reserve Bank said.
After the withdrawal of legal tender character of old Rs 500/1000 notes from November 9, a Rs 24,000 per week limit (including from ATM) on withdrawal has been put in place. Additionally, RBI has also allowed banks operating currency chests to operate Chest Guarantee Scheme for Specified Bank Notes (SBNs)–CGSS if they have additional space.
However, they can do so if the additional space in their existing currency chest or additional storage space at the same centre which is nearly as safe and secure as that of a currency chest. Requisite approval for operating CGSS will be granted by RBI Regional Office concerned, on receipt of request from any bank, it said.
On Sunday, RBI had allowed banks to park such currencies at currency chests at the district level so as to decongest the storage facility. A currency chest operating at the point to be called Designated Chest (DC) will be required to operate a separate vault — to be named Chest Guarantee Vault (CGV) — as an extended arm of it, it had said.