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Friday, March 05, 2021

Savings bank accounts: RBI lifts all restrictions on cash withdrawals

The RBI move has come after almost four months since the Prime Minister first announced the withdrawal of high value notes.

By: ENS Economic Bureau | Mumbai |
March 14, 2017 1:16:50 am
RBI, Reserve Bank of India, cash withdrawal, cash withdrawal limit, cash withdrawal restriction, demonetisation, note ban, indian express news, businesss Reserve Bank of India (File Photo)

The Reserve Bank of India (RBI) on Monday lifted all restrictions on cash withdrawals from savings bank accounts imposed on November 8, 2016 after the withdrawal of Rs 500 and Rs 1,000 notes.

The RBI move has come after almost four months since the Prime Minister first announced the withdrawal of high value notes. Earlier, the RBI had removed all curbs on branch withdrawals from current account, cash credit and overdraft accounts on January 30 and limits placed on daily cash withdrawals from ATMs from February 1. However, the RBI had then decided to retain the weekly withdrawal limit of Rs 24,000 on savings bank accounts despite the Election Commission writing to the central bank to ease the weekly limits for candidates contesting the assembly polls.

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The RBI lifted the restrictions in two stages. It first allowed cash withdrawals up to Rs 50,000 from savings bank account from February 20 and then removed all restrictions on cash withdrawals from March 13.

“We are still compiling the data on the old notes. There are 4,000 currency chests in India, apart from this the RBI keeps the currency in 19 other places. The currency travels between these chests and the RBI. After December 30, the RBI had asked all the banks to compile the data on these old currencies and the RBI team has also finished checking that data on sample basis. The process of reconciliation of the accounts are on. We hope that this will get over in some time,” RBI deputy governor SS Mundra had said on February 7.

On demonetised money that has come back to the banking system, Mundra had said that certain things such as the data on cash taken by the co-operative banks, which is being compiled by Nabard, Indian currency lying with Nepal and Bhutan as part of an arrangement with these countries and the March 31 and June 30 window which allows some people to deposit old currency, were still on. “We will be able to give the final number on inflow of the abolished currency into the banks only after taking all of this into account,” Mundra added.

On March 11, Finance minister Arun Jaitley had said new currency notes worth over Rs 12 lakh crore were currently in circulation in the country. The last data the Reserve Bank of India has released was on February 24, and till then currency in circulation was about Rs 11,64,100 crore.”So, this is the quantum of currency which they, as on February 24, made available in the market. A fortnight has almost elapsed since then. This amount itself would have now increased to beyond Rs 12 lakh crore,” he said in Lok Sabha during Question Hour.

He said as far as the remonetisation exercise is concerned, the RBI has been injecting new Rs 500 and Rs 2,000 notes systematically into the market since November 8. The government had withdrawn from circulation old notes worth Rs 15.44 lakh crore of Rs 500 and Rs 1,000.

“Every currency note has to be verified — whether it is genuine or fake. Then the genuine and fake notes have to be segregated. It is a very large exercise. It is difficult to tell (the figure) now. Once the RBI completes the exercise, we will inform the House in details,” he said.

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