New withdrawal rules: Rs.50,000 from Savings Accounts daily

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Cash withdrawal rules changed again on Monday, Feb 20, 2017, to allow up to Rs.50,000 to be withdrawn at ATMs from savings bank accounts, the RBI announced recently.

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Withdrawal limits may be totally removed from March 13th. The Lok Sabha also passed a bill recently which criminalizes the holding of more than 10 units of Rs.500 and Rs.1,000 notes, making the offence punishable with a minimum fine of Rs.10,000 (which cannot be paid using the felonious units of old notes).

India’s economy faced a severe cash crunch following the unilateral decision to ban Rs.500 and Rs.1,000 currency notes, and the RBI has been issuing notifications to ease the impact of this disaster on the Indian public. The RBI tried their best ensured that the short supply of Rs.500 and Rs.2,000 currency notes did not impact the public by placing limits on the amount that people could withdraw from their bank accounts, and increasing this amount gradually.

Previous limits were Rs.2,000, up to Rs.4,500 in December, up to Rs.10,000 from January 16, and up to Rs.24,000 from January 30. From February 20 onwards, the limit has been increased to Rs.50,000.

Lok Sabha MP Mr. Shashi Tharoor in parliament brought up the fact that placing limits on how much money a person can withdraw from his/her bank account is totally illegal. However, owing to the lack of planning and poor implementation of the demonetization decision, there weren’t enough new notes to distribute among the public – which the RBI handled by ensuring everyone could only withdraw small amounts. It seems that the currency printing presses are catching up with demand, as the new withdrawal limit is Rs.50,000.

Reports indicate that Rs.500 and Rs.1,000 notes accounted for a total of Rs.15.4 lakh crore which had been in circulation and is now being processed into legal ‘white’ money by the banking system.

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