All withdrawal limits for current a/c holders removed

In a big relief to people and small businesses, RBI on Monday announced lifting of restrictions on daily withdrawal of money from ATMs and from current accounts but the weekly limit of Rs 24,000 on savings bank accounts will continue.

The Reserve Bank also promised to review the weekly limit in the near future depending on the pace of remonetisation.

"On a review of the pace of remonetisation, it has been decided to partially restore status quo ante," RBI said adding, cash withdrawal limit from ATMs stands withdrawn from February 1, 2017.

Banks, however, have been asked to fix their own limits, as has been the case before November 8, 2016, the day government scrapped high denomination currency notes of Rs 500 and 1,000.

RBI has also removed all limits on cash withdrawals from current accounts/ cash credit accounts/ overdraft accounts with immediate effect.

"The limits on Savings Bank accounts will continue for the present and are under consideration for withdrawal in the near future," it said.

It further said that banks have been "urged to encourage their constituents to sustain the movement towards digitisation of payments and switching over of payments from cash mode to non-cash mode."

Government and RBI had imposed limits on withdrawal of money from ATMs and bank branches in view of currency shortage following demonetisation.

These limits, however, were gradually eased with RBI pumping in new notes of Rs 500 and Rs 2000.

With RBI easing the weekly cash withdrawal limits for certain accounts, the Election Commission is set to ask candidates contesting assembly polls in five states to open current accounts to tide over currency crunch in meeting election expenses.

The latest move comes close on the heels of the Election Commission expressing its displeasure to the RBI for rejecting the request to enhance the cash withdrawal limit for candidates to Rs 2 lakh per week.

After the decision of the RBI, the Election Commission has decided to ask all candidates to open current accounts for meeting election expenses, sources said.

Such a move will help candidates to have enough hard currency as well as overcome problems faced with the existing Rs 24,000 per week cash limit set on savings accounts, the sources said.

Candidates are bound to open an election account for meeting poll-related expenditure which is monitored by the EC.

Since there is no mention of any specific category of account that needs to be opened, candidates mostly opt for savings account.

With the central bank putting in place limits on cash withdrawals in the wake of note ban, candidates are facing problems in meeting expenses where hard cash is required. The directions for the candidates related to opening current accounts are likely to be issued shortly by the poll watchdog.