Restrictions on Cash Withdrawal May Continue Even After the New Year!

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Many bankers are of the opinion that the existing restrictions on cash withdrawal from ATMs and banks are likely to continue even after December 30, 2016. It is because the demand of new currencies among people is still very high. Besides, the Reserve Bank of India and the currency printing presses have failed to supply enough new currencies as demanded by people. Hence, it is anticipated by the bankers that the restrictions might continue even after the New Year.A 50 day time frame was decided to complete the demonetisation drive that was officially announced on November 8, 2016 by the Prime Minister Narendra Modi. After announcing demonetisation of Rs. 500 and Rs. 1000, the Government of India had fixed a weekly withdrawal limit of Rs. 24,000 from banks and Rs. 2,500 per day from ATMs per person because of cash crunch that followed demonetisation.

There are many instances where banks have failed to disburse the current limit of Rs. 24,000 per week because of cash crunch. Considering the cash crunch, even if the restriction is withdrawn for individual customers as well as businessmen, banks may not be able to fulfil the growing demand for new currencies.

According to many bank officials, there is a possibility that the withdrawal limit can be relaxed provided the cash situation improves, but it may not be completely withdrawn. Also, it would be difficult for banks to fulfil the demands for cash by MSME and corporate organisations while banks are still struggling to meet the demands of individual customers.

SBI Chairperson Arundhati Bhattacharya also hints the same when it comes to removal of restrictions on cash withdrawal. She indicates that restrictions cannot be totally withdrawn unless sufficient cash is made available to banks. Besides, the Government of India and the Central Bank (RBI) have not specified clearly as to when the restrictions will be withdrawn.

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