New cash withdrawal rules: Exchange limit for old notes Rs2,000 from Friday

New Delhi: The government on Thursday reduced the amount of old Rs500 and Rs1000 notes notes that can be exchanged at bank branches to ₹ 2,000 for one person from ₹ 4,500 earlier to allow more people to avail the facility and reduce the long queues. This will be applicable starting on Friday.

In order to restrict people exchanging money multiple times, government has already asked banks to apply indelible ink on right hand fingers of depositors.

Also read: Banks to exchange notes only for their own customers tomorrow

However, economic affairs secretary Shaktikanta Das briefing reporters ruled out shortfall of cash availability as the reason behind the move. “The total cash amount of exchanging old notes against new notes has been reduced to enable larger number of people to reach bank counters,” he said.

Also read: Demonetization: Printing of new Rs2,000, Rs500 notes lags demand

The government also allowed people to draw up to ₹ 2.5 lakh for marriage purposes from bank account of one family member with a self-declaration that this facility will not be used by any other family member. Das said this change has been made after several representations to the government. “Operational details of the provision will soon be notified,” he added.

However, Das refused to give any commitments for easing restrictions on use of old ₹ 500 and ₹ 1,000 currency notes by people needing money to meet medical emergencies in private hospitals. At present, only government hospitals are allowed to accept such demonetized notes.

The government allowed farmers to withdraw up to ₹ 25,000 per week to help them in buying seeds and fertilizers on time. The limit is ₹ 24,500 for general public. Farmers can withdraw ₹ 25,000 after selling their produces at local mandis when the amount is deposited into their bank account. Time limit for payments of crop insurance premium for farmers has also been extended by 15 days.

Also read: Black money: Govt steps up scrutiny of cash deposits

Registered traders with APMC (agricultural produce market committee) have also been allowed to withdraw ₹ 50,000 per week like earlier allowed to business entities to meet their sundry cash requirements like payments to labourers. All such bank accounts have to be Know-Your-Customer (KYC) compliant.

The government also allowed central government employees up to Group C to withdraw advance salary of ₹ 10,000 that will be adjusted from their November salary.