Immediately post demonetization, the weekly limit was capped to Rs 10,000 which was further changed to Rs 24000.
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Taking into account the problem faced by the masses on government’s move of demonetization, RBI on Monday has allowed bank withdrawal limit of current legal tender notes (Rs 2000, Rs 500, Rs 100, Rs 50, Rs 20, Rs 10, Rs 5) beyond the current limits from 29th November.
This move by RBI is aimed to increase circulation of currency in the economy when there is a problem of an extreme cash crunch.
Say you deposited valid legal tenders of the value of Rs 4000, so you are free to withdraw Rs 4000 extra over and above the weekly withdrawal limit of Rs 24000 i.e. you can withdraw Rs 28000 in that case.
RBI stated that preferably higher denomination currency of Rs 500 and Rs 2000 will be issued in case of such withdrawal.
Let’s take another example to understand this.
Say you deposited Rs 50,000 in your account, out of which Rs 24000 is the old 500 and 1000 note and Rs 26000 in the new currency. If you want to withdraw the entire Rs 50,000 this week itself, you easily withdraw Rs 50000 since the amount deposited above Rs 24000 was in legal tender notes.
Your account in such case will be categorized into old and new currency notes.
The same rule is applicable for current account holders who have a bank withdrawal limit of Rs 50000 per week.
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According to RBI, this step was taken to encourage people who were hesitant to put their money in the bank due to the current withdrawal limit from banks.
This step was very important as it was hindering the active circulation of notes in the economy.
RBI governor, Urjit Patel urged masses to start using cash alternatives like digital wallets or debit card as it will make the entire procedure smoother and easier and will also help India in developing the cash-less nation.
The RBI stated that until November 27, Rs 8.45 lakh crore value of defunct notes of Rs 500 and Rs 1000 has been deposited in banks across the country. Out of this, the exchange of old notes amounted to Rs 33,948 and deposit of Rs 8,11,033 crore.
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RBI has decided to waive off any weekly limit for new legal tender currencies so that no shortage remains and cash flow happens smoothly in the economy.
It was found that people were hesitant to deposit back the currency due to fear of weekly withdrawal limit in case of an urgent requirement.
However, the ATM withdrawal limit of Rs 2500 will still be there until further notification comes from RBI.
It is likely that furthermore relaxation is expected in the days to come.