Demonetisation: RBI ups ATM withdrawal limit to Rs 4,500/day from 1 Jan

The Reserve Bank on Friday late night increased the withdrawal limit from ATMs to Rs 4,500 per day from the current Rs 2,500 from 1 January. However, there has been no change in the weekly withdrawal limit, which stands at Rs 24,000, including from ATM, for individuals (Rs 50,000 in case of small traders). “On a review of the position, the daily limit of withdrawal from ATMs has been increased (within the overall weekly limits specified) with effect from January 1, 2017, from the existing Rs 2,500 to Rs 4,500 per day per card,” the central bank said in a notification.  Following demonetisation of old Rs 500/1000 notes from 9 November, limits had been imposed on withdrawal of cash from banks as well as ATMs. The Reserve Bank’s notification further stated “there is no change in weekly withdrawal limits” and such disbursals “should predominantly be in the denomination of Rs 500”. Earlier in the day, the RBI had permitted White Label ATM Operators (WLAOs) to source cash from retail outlets. Most of the White Label ATMs are running dry since demonetisation as the operators were facing difficulties in sourcing cash from their sponsor bank(s). Friday was the last day to deposit the invalid currency notes in banks. However, people still have time to exchange the currency notes at designated RBI counters till March 31 after giving valid reasons for not depositing defunct notes in their accounts by December 30. However, it remains to be seen whether the relaxation in cash limits will be of any help to the customers as, according to media reports, banks do not yet have enough cash to supply to the ATMs. A report in The Indian Express on Friday said only 40 percent of the 2.2 lakh ATMs in the country have cash to serve the public. The report quotes Ramaswamy Venkatachalam, managing director, India and South Asia, Fidelity Information Services (FIS), as saying that banks are not meeting the “full cash requirement” to operate ATMs round the clock. The RBI and the government also seem to be clueless about when the cash situation will return to normalcy, though they insist there is enough notes to dispense. Even on the 50th day of demonetisation they have not been able to provide the update the details of the new currency issued and also the deposits of old notes received. The last press release on the cash situation was on 21 December from the RBI. As of 19 December, the banks have issued Rs 5.93 lakh crore to public either over the counter or through ATMs. That is a nearly 40 percent of the cash sucked out of the system on 9 November, when the demonetisation came into effect. In this backdrop, while the public and the authorities are remain clueless about when the cash situation will improve, the increase in withdrawal limit from ATMs would mean little for the customers. With PTI