Home >Politics >Policy >Cash withdrawal rules to be eased after 80% remonetisation: Official

New Delhi: The government is considering easing rules on cash withdrawals, starting with cooperative banks, once 80% of the new currency is introduced into the system, a top official said on Thursday. With 50% or Rs7.5 trillion worth of remonetisation complete, queues at banks have reduced substantially and are visibly longer only in poll bound states like Uttar Pradesh and Punjab, he said.

The official added that the restrictions on cash withdrawals will be first eased in case of cooperative banks and then for all the scheduled commercial banks.

Prime Minister Narendra Modi had on 8 November announced junking of old Rs500 and Rs1,000 notes, and replaced the currency with new Rs2,000 and Rs500 notes.

Along with demonetisation, restrictions were placed on bank counter as well as ATM withdrawals. The withdrawal limit from banks is Rs24,000 a week, including a maximum of Rs2,500 from ATMs per day. The scrapped currency made up for 86% or Rs15 trillion of bank notes in circulation as on 8 November.

Also read: New note ban rules and regulations as of 15 December

“We could not print all the currencies in one go because we wanted the money to be channelised in the system first," he said.

“When 80% of new currency is pumped in into the system, withdrawal restrictions will be eased," he said. “Withdrawal restrictions will first be relaxed for cooperative banks and then for all banks. And over time as remonetisation is completed they will be removed totally."

Before the announcement of demonetisation, the government had already arranged for the printing of 200 crore 2,000 notes, or roughly about 4 trillion in value. They were the first set of notes to be circulated. Thereafter, a new 500 note was introduced and now all the four printing presses of RBI at Dewas in Madhya Pradesh, Nashik in Maharashtra, Salboni in West Bengal and Mysuru in Karnataka are working overtime to replenish the exhausted currencies.

The official said the restrictions will be withdrawn once the situation stabilises.

“Remonetisation has substantially happened and as and when it (stabilisation) happens, restrictions will be eased," he said, adding that there will be no cap on deposits made in the bank from January 2017.

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