Cash withdrawal limits likely to stay after banned note-deposit deadline ends | business-news | Hindustan Times
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Cash withdrawal limits likely to stay after banned note-deposit deadline ends

As the demonetisation drive closes today, top sources in the government say that the withdrawal limits are not going away anytime soon. Top sources in the tax department say that some limit on deposit and withdrawal should remain, as this helps better monitoring of black money. “Even if the withdrawal limit is increased from Rs 24000 per week, a limit should stay. This helps in better monitoring of legitimacy of the money. It also helps to reduce the cash circulation in the economy,” said a source in the know of the matter, who did not wish to be named.

black money crackdown Updated: Dec 30, 2016 12:20 IST
HT Correspondent
demonetisation
Discontinued Indian currency notes of Rs 1,000 seen after they were deposited by people at a bank in Bangalore.(AP)

The government is unlikely to withdraw cash withdrawal limits soon, tax department sources said on Friday, the last day to deposit junked Rs 500 and Rs 1000 notes.

“These limits are unlikely to be eased completely. It will be done in a phased manner,” said a top government official, who did not wish to be quoted.

The sources argued that some limits on deposit and withdrawal helped better monitoring of black money. “Even if the withdrawal limit is increased from Rs 24000 per week, a limit should stay. This helps in better monitoring of legitimacy of the money. It also helps to reduce the cash circulation in the economy,” said a source in the know of the matter, who did not wish to be named.

The limits stand at a weekly withdrawal of Rs 24000 from banks for an individual and Rs 2500 per day from an ATM.

Bankers have requested the finance ministry to not remove the withdrawal limits completely, given the cash crunch at banks. Of the Rs 15.44 lakh crore worth of currency scrapped by the government in a surprise move by Prime Minister Narendra Modi on November 8, only about Rs 7 lakh crore has been remonetised, which leaves banks seriously under-cashed.

While announcing the ban of Rs 1000 and Rs 500, the government imposed limits on deposit of old currency and withdrawal of new currency, keeping December 30 as the deadline. From Friday, old currency will not be allowed to be deposited in banks, though exchange is allowed at RBI offices across the country. But, so far, the government has not notified any changes in the withdrawal limits from banks and ATMs.