Demonetisation: RBI may not relax cash withdrawal limit for 3 weeks to a month

Your weekly cash withdrawal limit of Rs 24,000 is likely to continue for another three weeks to a month before the Reserve Bank of India (RBI) finally decides to relax the cap.

The central bank, however, could double the daily withdrawal limit at the ATMs after a detailed analysis of transaction patterns and payment modes, sources said.

The RBI has increased the withdrawal limit at the ATMs thrice since the announcement of the demonetisation of bank notes of Rs 500 and 1000 denominations on November 8. But the weekly limit has been maintained at Rs 24,000.

“The cash situation is near normal and in the next one month, the restrictions would be eased considerably,” a senior government official told Hindustan Times seeking anonymity.

Read | Deposited over Rs 2 lakh after demonetisation? You may get multiple tax notices

Sources said that the central bank may increase the withdrawal limit from the ATMs to align it with the weekly cap of Rs 24,000. The move aimed at taking pressure off the banks.

“Cash withdrawal caps would depend on the cash supply. Going by the status at present, it looks that the limit could be eased around middle to end February,” said Soumya Kanti Ghosh, chief economic adviser of the State Bank of India.

Between November 9 and December 30, Rs 15.4 lakh crore was sucked out of the system while the Reserve Bank of India pumped in Rs 9.2 lakh crore.

Meanwhile, the Parliamentary Standing Committee on Finance is likely to ask RBI governor Urjit Patel to come up with a time frame for the removal of restrictions on cash withdrawals.

The panel, which quizzed Patel last week, is expected to call him again along with the top finance ministry officials and bankers after the presentation of the Union Budget to further brief it on demonetisation.

Though Patel has said the restrictions are temporary, pressure is building on him to provide clarity on the supply of new currency notes and cash withdrawal restrictions.

According to a SBI study, 75% of the total value of the scrapped currency notes was likely to be pumped back into the system. By end February, over 80% would be back, the study added.

Read | Demonetisation: Banks, ATMs in need of cash after RBI raises withdrawal limits