Just two days after increasing the exchange limit of the now defunct currency notes of ₹ 500 and ₹ 1000 at banks and select post offices, the government has again reduced the limit to ₹ 2000 per person from ₹ 4500.
Two days ago the same limit was raised to ₹ 4500 from ₹ 4000.
From Friday onwards, the banks and post offices will only exchange defunct notes worth ₹ 2000 only once till December 30, the rest will be deposited in your account.
“There is enough cash available with the government. This (reducing currency exchange limit) is mainly to enable larger number of people to reach the counter… We find that many people are not able to reach the counter and same persons are visiting the counter multiple times and other people are not getting the benefits,” Das said.
At the time of the cash crunch, this new move is further likely the hit the people who have been waiting in ATM queues to withdraw cash. It’s been a week that the queues leading up to the banks and ATMs haven’t got shorter.
But, not everything is gloomy. The government finally took note of the currency crunch having a negative impact on the agriculture sector. Farmers can now withdraw up to Rs 50,000 cash per week from the banks.
The government has also extended the deadline for payment of crop insurance premium by 15 days and permitted APMC-registered traders to withdraw up to Rs 50,000 per week.
These steps will ensure that sowing takes place adequately in the Rabi season and enough cash is available to the farmers to buy fertiliser, seeds and other inputs, said Economic Affairs Secretary Shaktikanta Das.
“The government has decided to permit the farmers to draw up to Rs 25,000 per week against the crop loan sanctioned and credited to their accounts, subject to the limits…and this will also apply to Kisan Credit Cards,” he announced.
However, there is a rider – The accounts have to be in the name of the farmer and the account will have to be KYC compliant.
Similarly, the registered traders with the Agricultural Produce Marketing Committee (APMC) markets also will be permitted to draw Rs 50,000 per week to meet various cash requirements like payment of wages to workers and other sundry expenses.
The government has also allowed its Group C employees, including from PSUs, defence and railways, to get salaries up to Rs 10,000 in cash in advance which will be adjusted against their November salary.
“It is expected that this will relief pressure on banks,” Das said.
The government also took note of the ongoing wedding season and how hard the demonetisation has hit those families who have to conduct weddings. Indian wedding are a big affair and most of the payments in that sector runs only on cash.
Now, families preparing for a wedding can withdraw up to ₹ 2,50,000 from bank account giving PAN details and a self-declaration.
“It has been decided that for wedding ceremonies which are going on, up to Rs 2.50 lakh will be permitted to be drawn from the bank account… and that has to be drawn one person per marriage and can be drawn either from the account of the father or the mother or the account of either of the boy or girl, who are getting married, and these accounts naturally will have to be KYC compliant,” Das explained.
ATM withdrawals are limited to ₹ 2500 per day and individuals are allowed to withdraw up to ₹ 24,000 per week through cheque from their respective bank branches.
On November 8 last week, ₹ 500 and ₹ 1,000 notes were made defunct on November 8 by Prime Minister Narendra Modi in an address to the nation.
(With inputs from PTI)