Farmers can buy seeds with old Rs 500 notes; relief for small businesses

The government further eased cash withdrawal norms on Monday for small traders and farmers, who are among the hardest hit by a shock recall of high-value currency about two weeks ago.

The government further eased cash withdrawal norms on Monday for small traders and farmers, who are among the hardest hit by a shock recall of high-value currency about two weeks ago.

Villagers wait inside a bank to make the transactions in Basendua village in Bulandshahr, in Uttar Pradesh. (AFP Photo)

The Reserve Bank of India said small businesses can withdraw up to Rs 50,000 in cash every week from their overdraft and cash-credit accounts that have been active for at least three months. This facility was earlier allowed only for current accounts of traders.

But the facility will not be applicable for personal overdraft accounts, a statement issued by the central bank said.

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The finance ministry also decided to allow farmers to purchase seeds with the now-scrapped Rs 500 notes from the centres, units or outlets belonging to the central or state governments or public sector undertakings.

The government earlier had already relaxed the norms for farmers allowing them to draw up to Rs 25,000 a week against crop loans.

The government has unveiled several measures to ease the hardships of demonetisation on the poor, farmers and traders but the opposition says poor implementation of the policy – which is aimed at weeding out black money – has triggered chaos across the country.

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