The Reserve Bank of India on Monday upped the withdrawal limits from ATMs and current accounts with immediate effect. This move probably shows that the central bank has pushed more cash into the banking system after it drew flak from the public and opposition parties on the cash crunch triggered by the scrapping of high-value ₹500 and ₹1,000 bank notes.
The limit on withdrawals from ATMs has been enhanced from ₹4,500 to ₹10,000 per day per card, within the existing overall weekly withdrawal limit of ₹24,000. The limit on withdrawal from current accounts, which have been operational for the last three months or more, has been enhanced from ₹50,000 to ₹1 lakh per week, and it extends to overdraft and cash credit accounts also.
In a move that caught the nation unawares, Prime Minister Narendra Modi had announced that ₹500 and ₹1,000 notes will no longer be legal tender from midnight of November 8, 2016.
Though the RBI was galvanised into action, it did a series of flip-flops in implementing the demonetisation scheme (between November 9 and December 30, 2016).
When the RBI issued a notice on withdrawal of legal tender status for ₹500 and ₹1,000 notes on November 8, it said that when ATMs are re-calibrated and re-activated to dispense ₹2,000 and new ₹500 notes, cash drawals from ATMs will be restricted to ₹2,000 per day per card up to November 18, 2016, and the limits will be raised to ₹4,000 per day per card from November 19.
On November 13, the daily limit on withdrawal from ATMs was increased from ₹2,000 to ₹2,500 per day in the recalibrated ATMs. With effect from January 1, 2017, this limit was upped from ₹2,500 to ₹4,500 per day per card. Cash withdrawals from bank accounts, over the bank counters, were restricted to ₹10,000 per day subject to an overall limit of ₹20,000 a week from November 9 till end of business on November 24. The limits were to be reviewed after this.
On November 13, the weekly limit of ₹20,000 for withdrawal from bank accounts was increased to ₹24,000 and the daily limit of ₹10,000 per day was withdrawn.