The Reserve Bank of India (RBI) on Monday announced that it would remove limits placed on daily cash withdrawals from automated teller machines (ATMs) from February 1 and all curbs on branch withdrawals from current account, cash credit and overdraft accounts with immediate effect. However, the RBI has decided to retain the weekly withdrawal limit of Rs 24,000 on savings bank accounts despite the Election Commission asking the RBI to relax the weekly limits for candidates contesting the Assembly elections in five states.
“On a review of the pace of remonetisation, it has been decided to partially restore status quo ante,” RBI said adding, cash withdrawal limit from ATMs stands withdrawn from February 1, 2017. The RBI also promised to review the weekly limit of Rs 24,000 in the near future depending on the pace of remonetisation. “The limits on savings bank accounts will continue for the present and are under consideration for withdrawal in the near future,” it said.
According to a senior official of a bank, people, including candidates contesting the elections, who want higher withdrawals can open a current account after completing the formalities. The RBI has removed all limits on cash withdrawals from current accounts/ cash credit accounts/ overdraft accounts with immediate effect. On January 24, the EC had asked the RBI to hike the weekly withdrawal limit for candidates contesting the elections in five states from Rs 24,000 to Rs two lakh.
The EC had on January 24 written to the central bank, highlighting the problems faced by candidates due to the withdrawal limit.
Meanwhile, the RBI has put a rider on withdrawal limits. In Monday’s circular, the RBI said banks have been asked to fix their own withdrawal limits, as has been the case before November 8, 2016, the day government scrapped high denomination currency notes of Rs 500 and 1,000.
While some of the big banks may remove the limits, smaller private banks may are likely to put some restrictions, said an official of a bank.
The RBI also reminded banks about going digital in Monday’s circular. “Banks are urged to encourage their constituents to sustain the movement towards digitisation of payments and switching over of payments from cash mode to non-cash mode,” the RBI said in a circular to banks.
After withdrawing the legal tender status of Rs 500 and Rs 1,000 notes, the RBI changed the withdrawal limits several times. Initially, it had slapped curbs on cash withdrawals and set a daily withdrawal limit of Rs 2,500 from the ATMs and Rs 24,000 from bank accounts per day from November 10.