The Reserve Bank of India (RBI) announced on Wednesday, all cash withdrawal limits imposed post-demonetisation will be lifted this Holi i.e. 13 March, 2017. People will then be able to withdraw any sum of money from their savings accounts.
The central bank will remove the cash withdrawal limits in phases. The limit will first be increased from the current limit of Rs.24,000 per week to Rs.50,000 per week, starting 20 February, 2017. This withdrawal limit and all other restrictions imposed on cash withdrawal post November 8, 2016, when the Prime Minister announced the demonetisation of all Rs.500 and Rs.1000 banknotes, will be lifted on 13 March.
At present there is a daily cash withdrawal limit of Rs.10,000 and a weekly limit of Rs.24,000 for savings account. The Reserve Bank had earlier lifted all cash withdrawal limits from overdraft accounts, current accounts and cash credit accounts. The RBI initially imposed a daily limit of Rs.2,500 for savings accounts post-demonetisation. This limit was then revised to Rs.4,500 per day and finally to Rs.10,000 per day on January 16, 2017.
Although the RBI will remove all cash withdrawal limits starting 13 March, the central government hopes to discourage people from cash transactions as much as possible. The Finance Minister, Arun Jaitley, announced a range of measures in his budget speech on 1 February, 2017 to encourage cashless transactions. These include a ban on cash transactions above Rs.3 lakh from 1 April, 2017. Additionally, the banks have increased cash transaction fees, further encouraging people to opt for cashless payments through credit cards, debit cards and online wallets.