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Currency exchange limit cut to Rs 2,000; can withdraw Rs 2.5 lakh for weddings

People can only exchange Rs 2,000 in cash over the counter in banks, the government announced on Thursday

business Updated: Nov 17, 2016 12:39 IST
Suchetana Ray
Demonetisation

People stand in queues to withdraw money and exchange old currency notes in a bank in Allahabad on Wednesday. (PTI Photo)

People can only exchange Rs 2,000 in cash over the counter in banks, the government announced on Thursday, revealing a raft of measures aimed at helping farmers tide over chaos triggered by a surprise recall of high-value currency.

Economic affairs secretary Shaktikanta Das told reporters that families with weddings can withdraw Rs 2.5 lakh. They will have to sign a self-declaration document saying the money was drawn against only one account – father, mother, groom or bride.

And from Friday, the limit of the one-time exchange of the now-scrapped Rs 1,000 and Rs 500 notes is fixed at Rs 2,000. The earlier limit was Rs 4,500.

The move is aimed at decongesting the snaking queues outside banks and ATMs across India following last week’s withdrawal of banknotes.

The Centre also permitted central government employees up to Group C categories to withdraw Rs 10,000 in cash against their November salary.

Read | Exchange limit cut to Rs 2,000; help for weddings: 5 points on demonetisation

Prime Minister Narendra Modi’s decision to scrap Rs 1000 and Rs 500 notes was aimed at stamping out illegal cash and counterfeit currency from the economy.

But a bumpy execution has left the poor, small traders, farmers and women left with little cash in hand to even meet daily expenses.

This has provided ammunition to opposition parties that have targeted the government over the “anti-poor” move in Parliament. But the Centre moved on Thursday to plug some of these loopholes.

Das announced farmers can draw Rs 25,000 a week in cash from bank accounts in their names that are compliant with personal data declaration norms – a move meant to ensure that the demonitisation move doesn’t hurt the winter rabi crop and farmers have enough money to buy seeds, fertilizers and produce.

Agricultural traders will be allowed withdraw Rs 50,000 a week, expected to help them pay daily wages to labourers and help in the smooth running of farm markets, or mandis, that service large cities such as Delhi. The time limit for payment of crop insurance premium was also extended by 15 days.

This came on the back of several similar measures announced last month to ease hardships on farmers and small traders. Banking correspondents – an informal network of 130,000 personnel in rural areas –were allowed multiple withdrawals a day, with an individual transaction limit of Rs 50,000.

Businesses with current accounts active for three months were also permitted to withdraw Rs 50,000 every week.

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