The Reserve Bank of India (RBI) said on Wednesday it will remove the withdrawal limit from ATMs and savings accounts from March 13, with the cash crunch triggered by the government’s demonetisation exercise easing across the country.
Cash withdrawal limit from savings bank accounts will be relaxed to Rs 50,000 from February 20 to March 13, the central bank said.
“The limits on cash withdrawal from savings bank accounts continue to be in place. In line with the pace of remonetisation, it has now been decided to remove these limits in two stages,” said RBI deputy governor R Gandhi after the central bank announced the sixth bi-monthly monetary policy review.
Several limits on cash withdrawals from banks and ATMs were imposed after the government’s surprise move to recall Rs 500 and Rs 1,000 on November 8 that led to severe cash crunch.
The central bank has kept pace with the remonetisation process by gradually relaxing the withdrawal limits.
On January 30, RBI had allowed withdrawal up to Rs 24,000 from savings accounts. This was preceded by the relaxation on January 16 when the limit was raised to Rs 10,000 per day from Rs 4,500.
Meanwhile, the Lok Sabha has passed a bill that makes holding of more than 10 old notes of Rs 500 and Rs 1000 an offence punishable with a minimum fine of Rs 10,000.
In the ongoing process of remonetisation, banknotes worth Rs 6.78 lakh crore returned to the formal banking system between November 10 and January 13, taking the total currency in circulation to Rs 9.1 lakh crore, the government said on Tuesday.
During the note ban in November, the government had said that Rs 15.4 lakh crore had been circulating in banknotes of Rs 500 and Rs 1000.