Cash withdrawal limits and bank account rules as of 8 February
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New Delhi: The Reserve Bank of India (RBI) on Wednesday announced that all restrictions on cash withdrawal from savings bank account will be removed from 13 March. But this will be done in two phases. Beginning 28 February, the cash withdrawal limit will be increased to Rs50,000 per week from the existing Rs24,000.
Earlier, the RBI had removed cash withdrawal limits from ATMs from 1 February. In a notification, the RBI had also removed all limits on current account and overdraft accounts with immediate effect. The banking regulator had at that time said that “cash withdrawal limits on savings bank accounts will continue for the present and are under consideration for withdrawal in the near future.”
The cash withdrawal limit at automated teller machines (ATMs) was earlier enhanced to Rs10,000 per day per saving bank account on 16 January. The limit was set within the existing overall cash withdrawal cap of Rs24,000 per week per account at both banks and ATMs.
The Narendra Modi government had imposed restrictions on cash withdrawal and deposits since it announced the decision to demonetise old Rs500, Rs1,000 currency notes on 8 November 2016.
Here is a list of RBI rules on cash withdrawal and deposits as of 8 February:
■ From 28 February, the weekly cash withdrawal limit on savings accounts at banks branches, will be raised to Rs50,000 from the current Rs24,000 per savings account. From 13 March, there won’t be any limit on cash withdrawal from savings bank accounts.
■ All cash withdrawal limits from ATMs have already been removed.
■ All limits on cash withdrawal vis-à-vis current accounts has been removed with immediate effect.
■ The tax department has asked banks to report deposits in any account aggregating Rs10 lakh in a year, as well as cash payments of Rs1 lakh or more on credit card bills. The department also reiterated its November 2016 instruction asking banks to report all cash deposits of Rs2.5 lakh or more made in one or more accounts of a person during 9 November to 30 December 2016.
■ The last date for depositing old demonetised currency notes of Rs500 and Rs1,000 at banks was 30 December 2016. After the 30 December deadline, exchange of old notes allowed only at RBI offices subject to regulations till 31 March. However, confusion persisted over whether these can be deposited at specified RBI branches until 31 March this year after submitting a declaration form as PM Modi announced on 8 November. Later, the RBI said that only Indians who were abroad during 9 November to 30 December 2016 have been given a three-month grace period till 31 March to deposit the junked notes, while for the NRIs, it is six months till 30 June.
■ The government’s Specified Bank Notes Cessation of Liabilities Ordinance has made holding of more than 10 junked Rs500 and Rs1,000 currency notes a penal offence punishable with a minimum Rs10,000 fine.
■ RBI has kept limits on prepaid payments services providers or e-wallets to load up to Rs20,000, instead of Rs10,000 before. The merchants can transfer funds from such PPIs to their own linked bank accounts up to Rs50,000 per month, without any limit per transaction.
■ Traders registered with the APMC and mandis can withdraw up to Rs50,000 a week from their current accounts.
■ Additional 60-day grace period for farmers to repay their crop loans and avail 3% interest subvention. Farmers allowed to withdraw up to Rs25,000 a week from their loan or deposit accounts.