To encourage people to deposit valid currency notes in banks, the Reserve Bank of India has said that bank customers will be able to withdraw deposits made in current legal tender notes beyond the current limits. The move is clearly aimed at increasing currency circulation in system at a time when there is a severe cash-crunch.
As of now the weekly withdrawal limit for an individual stands at ₹ 24,000. So anyone who deposits money in banks via legal tender, can withdraw the same amount in addition to the weekly limit.
The same rule applies for current account holders, where the withdrawal limit is ₹ 50,000 a week for small traders.
In a circular that was released late on Monday evening, the Reserve Bank said that it has been reported that “certain depositors are hesitating” to deposit their monies into bank accounts in view of the current limits on cash withdrawals from accounts.
“As it is impeding active circulation of currency notes, it has been decided, on careful consideration, to allow withdrawals of deposits made in current legal tender notes on or after November 29, 2016 beyond the current limits…Preferably, available higher denominations bank notes of ₹ 2000 and ₹ 500 are to be issued for such withdrawals,” the Reserve Bank said.
The RBI also revealed that the banks across the country collected ₹ 8.45 lakh crore worth of scrapped notes of ₹ 500 and 1000 until November 27.
Of this, the exchange (of old notes) amounted to ₹ 33,948 crore and deposits amounted to ₹ 8,11,033 crore.
(With inputs from PTI)