Current Account curbs go, ATMs to follow
New Delhi: In response to the Election Commissions (EC) request to enhance the cash withdrawal limit for nominated candidates in the five poll-bound states from Rs 24,000 to Rs 2 lakh per week, the RBI on Monday ended all curbs on withdrawals from Current Accounts, Cash Credit Accounts and Overdraft Accounts with immediate effect. However, the curbs on Savings Bank accounts across the counter will remain.
A Reserve Bank of India notification said limits on ATM withdrawals will also go from Wednesday.
“On a review of the pace of remonetisation, it has been decided to partially restore status quo ante,” the RBI said.
“Limits placed vide the circulars cited above on cash withdrawals from Current accounts/ Cash credit accounts/ Overdraft accounts stand withdrawn with immediate effect.
“The limits on Savings Bank accounts will continue for the present and are under consideration for withdrawal in the near future,” it added.
The limits were placed following the November 8 demonetisation of Rs 1,000 and Rs 500 notes. The upper limit at ATMs was Rs 2,500 initially, and later it was raised to Rs 4,500.
Earlier this month, the RBI hiked the daily ATM withdrawal limit from Rs 4,500 to Rs 10,000 and doubled the weekly Current Accounts withdrawal limit to Rs 1 lakh.
The upper limit for weekly withdrawal from bank accounts had been raised to Rs 24,000 from Rs 20,000 in November.
While lifting of ATM withdrawal limits from February 1 will represent coming full circle for these machines in respect of demonetisation, it is to be seen whether the amount of cash supplied by RBI will be able to satisfy the demand of citizens in future.
Following the RBI turning down its earlier request regarding candidates, the EC on Saturday again wrote to the central bank asking it to reconsider its decision.
Given the cap of Rs 24,000 on withdrawal per week post-demonetisation, the candidates can withdraw only Rs 96,000 during the three to four week time before polls, against the expenditure limit of Rs 28 lakh for Punjab, Uttarakhand and Uttar Pradesh, and Rs 20 lakh for Manipur and Goa, the EC said.
With savings bank withdrawal limits set to continue for some more time in respect of ATM transactions even after Wednesday, the EC is likely to ask candidates to open current accounts from which cash restrictions have been lifted.