Home / Industry / Banking /  Cash withdrawal limit for ATMs, current accounts removed: RBI

Mumbai: The Reserve Bank of India (RBI) will end curbs on cash withdrawal at ATMs from 1 February for current account holders.

After the demonetization announcement on 8 November, the government had placed limits on cash withdrawals. RBI had progressively raised the cash withdrawal limits at ATMs from Rs2,000 on 9 November to Rs10,000 per card a day as of 16 January.

“However, banks may, at their discretion, have their own operating limits, as was the case before 8 November 2016," RBI said in a notification on its website on Monday.

Cash withdrawal and deposit rules as of 30 January

In case of current accounts, cash credit accounts and overdraft accounts, the regulator’s previous limits have been removed with immediate effect, the notification said.

The limits on savings bank accounts will continue and are under consideration for withdrawal in the near future, RBI said. The withdrawal limit is currently at Rs1 lakh per week for current account holders. It is Rs24,000 for savings account holders.

Companies that replenish cash in ATMs say there is enough cash in the system to end the withdrawal caps.

“Daily cash injection into ATM network has been near normal (pre-demonetization levels) for the past few weeks," said Rituraj Sinha, president of Cash Logistics Association.

Inadequate imports of paper for new currency notes may have led to cash crunch

“The cash situation has improved significantly specially in the retail community. Based on actual reaction on ground, banks will also strategize," said Navroze Dastur, managing director of NCR Corp. India Pvt. Ltd, the country’s largest ATM maker.

On 24 January, the Election Commission (EC) asked RBI to raise the withdrawal limit of candidates contesting the upcoming polls to Rs2 lakh. As RBI refused to raise the limit, EC asked RBI on Saturday to reconsider its decision.

“The Election Commission has expressed serious concerns about the cursory manner in which the issue has been dealt with and it appears that RBI has not realized the gravity of the situation," the poll panel said in a letter to RBI governor Urjit Patel, Mint reported on Monday.

What denominations of currency notes do we need?

In its notification, the banking regulator has also asked banks to continue the drive to cashless payments.

“Some difficulty will be seen in three-to-four geographies with respect to cash circulation, but the overall situation is back to normal," said Rajnish Kumar, managing director of State Bank of India.

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