RBI removes all cash withdrawal limits after 4 months of note ban; ATMs run dry in Hyderabad

All limits on savings bank cash withdrawals post-demonetisation ended on Monday even as reports of severe cash shortage emerged from some parts of the country. The removal of withdrawal limit is in keeping the announcement by the Reserve Bank of India (RBI) last month. This comes after more than four months of the announcement of the note ban on 8 November, 2016. In a two-stage process, the weekly withdrawal limit per account had been raised to Rs 50,000 from Rs 24,000, with effect from 20 February, and all limits on ATM withdrawals were slated to cease from 13 March. The announcement had been made by RBI Deputy Governor R Gandhi following the fiscal’s last monetary policy review announcement by the central bank in February, when it kept its key interest rate unchanged at 6.25 per cent, saying it awaited data on the full impact of the government’s demonetisation drive. On 30 January, the RBI had ended all curbs on withdrawals from Current Accounts, Cash Credit Accounts and Overdraft Accounts. [caption id=“attachment_2944148” align=“alignleft” width=“380”]  Reuters[/caption] The limits were placed following the 8 November demonetisation of Rs 1,000 and Rs 500 notes. The upper limit at ATMs was just Rs 2,500 initially and was later raised to Rs 4,500. In January, the RBI had hiked the daily ATM withdrawal limit to Rs 10,000 and doubled the weekly Current Account withdrawal limit to Rs one 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 represents coming full circle for these machines in respect of demonetisation, the return to normalcy in terms of cash available in them is still awaited, indicating the slow pace of remonetisation. A report in The Hindu said of 45 ATMs in the heart of Hyderabad, only three had cash on Monday, resulting in a race for cash in the city. According to an Axis Bank staff quoted in the report, the cash being refilled in the ATMs is getting over quickly and it has been so for the last one week. This is despite finance minister Arun Jaitley insisting multiple times that there has not been any cash crunch after the note ban. “We have almost completed the demonetisation process and it has been the smoothest possible replacement of currency anywhere in the world,” said Jaitley on 25 February. On 10 March, Jaitley, who has been on Monday given the additional charge of defence after Manohar Parrikar returned to Goa as chief minister, had told Lok Sabha that new currency notes worth over Rs 12 lakh crore are currently in circulation in the country. Jaitley said the RBI has been injecting new currency notes of Rs 500 and Rs 2,000 denominations systematically into the market since 8 November. He said that the last data the Reserve Bank of India has released was on 24 February and till then currency in circulation was about Rs 11,64,100 crore. “So, this is the quantum of currency which they, as on February 24, made available in the market. A fortnight has almost elapsed since then. This amount itself would have now increased to beyond Rs 12,00,000 crore,” he said during Question Hour. However, it has to be noted that there neither the RBI nor the government has been released the data on the exact amount of deposits received after the demonetisation. Both the authorities have denied key information on the exercise to the public even under RTI Act. With inputs from IANS, PTI