In a big relief to people and small businesses, RBI on Monday announced lifting of restrictions on daily withdrawal of money from ATMs and from current accounts but the weekly limit of Rs 24,000 on savings bank accounts will continue.
The Reserve Bank also promised to review the weekly limit in the near future depending on the pace of remonetisation.
The easing will come into effect from February 1.
“On a review of the pace of remonetisation, it has been decided to partially restore the status quo ante,” RBI said in a notification on Monday.
“The limits on savings bank accounts will continue for the present and are under consideration for withdrawal in the near future … Limits on cash withdrawals through ATMs is being withdrawn from February 1,” it said.
The move comes as the remonetisation has reached almost 50 per cent now and a recent SBI Research report said around 70 per cent normalisation would be achieved by end-February.
RBI last week had said the new currency notes in circulation had reached around Rs 9.8 lakh crore.
The central bank move also comes amidst RBI rejecting a a request by the Election Commission to lift withdrawal limits for the candidates in five poll-bound states and a day ahead of the Budget Session of Parliament.
The central bank said the limits on cash withdrawals from current accounts or cash credit accounts or overdraft accounts is withdrawn with immediate effect.
RBI, however, said banks may, at their discretion, have their own operating limits as was the case before November 8, when the note ban was imposed.
Following demonetisation, RBI had put withdrawal limit Rs 2,000 per day from ATMs and Rs 10,000 per week. Customers holding a current or overdraft or cash credit accounts, were allowed to withdraw up to Rs 50,000 in a week.
Towards November end, RBI increased the caps on savings bank withdrawals to Rs 24,000 a week.
Early January, it was further relaxed to Rs 4,500 per day from ATMs, but retained the weekly withdrawal limits. On January 16, RBI enhanced the ATM withdrawals further to Rs 10,000 daily, while keeping the weekly limits at Rs 24,000.
The central bank also enhanced the limit on withdrawal from current accounts, overdraft and cash credit accounts to Rs 1,00,000 per week.
With Monday’s notification, a customer can withdraw Rs 24,000 in a day through the ATMs, but he will exhaust the weekly limit of Rs 24,000. The customer will have to wait for another week to withdraw beyond that.
The notes that were scrapped on November 8 constituted 86 per cent or Rs 15.55 trillion of the currency in circulation.
The central bank also urged banks to encourage their constituents to sustain the movement towards digitisation of payments and switching over of payments from cash mode to non-cash mode.