Removal of withdrawal limits

The Reserve Bank of India will remove caps on cash withdrawals from savings bank accounts in two phases, taking away all restrictions on cash withdrawals on March 13 as it expects enough currency notes to be in circulation by then.

In the first phase, the weekly withdrawal limit will be raised to Rs.50,000 from Rs.24,000 effective February 20. As of now, farmers are allowed to withdraw up to Rs.50,000 a week, and people can up to Rs.2.5 lakh a week for marriage purposes. There is no limit on cash withdrawal from current account.

As on January 27, RBI said the currency in circulation is worth Rs.9.92 lakh crore. This is about 57% of approximately Rs.17.50 lakh crore that was in circulation before demonetisation on November 8.

RBI did not give out any fresh estimates of banned notes that have returned as it expects more deposits in old currency notes. The last date for depositing old currency notes was December 31, 2016, but the central bank has allowed NRIs to deposit their old currency notes till March 31.

RBI is also awaiting data on deposits from Nepal and Bhutan as well as deposits in cooperative banks.

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