As a Holi present, the government has gifted a much-needed respite for the masses. All restrictions on savings bank cash withdrawals post-demonetisation have been lifted.
A month ago, Reserve Bank of India (RBI) claimed to remove any limits on withdrawals soon. RBI formulated a two-stage process. Initially, the weekly withdrawal limit per account was increased to Rs 50,000, from Rs 24,000, with effect from February 20. The second stage claimed that all limits on ATM withdrawals will become inoperable from March 13.
The announcement had been made by RBI Deputy Governor R. Gandhi following the fiscal’s last monetary policy review announcement by the central bank in February, when it kept its key interest rate Status Quo at 6.25 per cent. The central bank cited a reason for not slashing the interest rate. It said it will consider the after-math of the government’s demonetisation drive before announcing a rate-cut.
On January 30, the RBI had ended all curbs on withdrawals from Current Accounts, Cash Credit Accounts and Overdraft Accounts.
The limits were imposed to manage the currency shortage post the big announcement of demonetisation on November 8, which made high-denomination notes of Rs 1000 and Rs 500 illegal.
Initially, however, the upper limit at ATMs was just Rs 2,500 whch was later upped to Rs 4,500, thereby easing out the daily spending activity of the masses.
After demonetisation, the usual pace of spending had shunned as people were left with scarce financial currency-in-hand. This is not all. The masses were also apprehensive about opulent spending as a strong rumour was abuzz. People started believing that they are being continuously watched and spied over by the government.
Interestingly, various novice brokers bloomed in the market where people were running errands to convert their black money into white currency. They charged a commission of anywhere between 10-30% to accept old currency and pay new currency in return.
All is well that ends well. The RBI has finally lifted all curbs on withdrawals – a Holi treat for The Aam Aadmi, indeed!