Reserve Bank removes cap on withdrawals from current a/cs

In view of the upcoming Assembly elections in five States, the Reserve Bank of India (RBI) on Monday withdrew the limits placed on cash withdrawals from current accounts/cash credit accounts/overdraft accounts with immediate effect. However, the limits on savings bank accounts will continue.

PTI reports that the Election Commission has decided to ask all candidates to open current accounts to meet election expenses after the latest relaxation by the apex bank.

The central bank also said the limits placed on cash withdrawals from ATMs (₹10,000 per day, per card, within the existing overall weekly limit of ₹24,000) stands withdrawn from February 1, 2017.

What this means is that a customer can withdraw his weekly limit at one go at an ATM.

However, the RBI added that banks may, at their discretion, have their own operating limits.

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The revocation on limits comes in the backdrop of the Election Commission of India’s request that candidates contesting elections in the five poll-bound States be able to make higher withdrawals to meet poll-related expenses. This will also benefit traders and small and medium enterprises.

Earlier, the central bank was not in favour of the Commission’s proposal to up the withdrawal limits only for candidates contesting Assembly elections in Manipur, Uttarakhand, Goa, Uttar Pradesh and Punjab.

So far, the limit on withdrawal from current accounts/cash credit accounts/overdraft accounts was ₹1 lakh per week.

In a notification to all banks, the RBI said in a review of the pace of remonetisation that it has been decided to partially restore the status quo ante (the previously existing state of affairs ) vis-a-vis cash withdrawals from bank accounts and ATMs. “The limits placed on cash withdrawals from current accounts/cash credit accounts/overdraft accounts stand withdrawn with immediate effect.

“The limits on savings bank accounts will continue for the present and are under consideration for withdrawal in the near future,” said the RBI. Further, the RBI has urged banks to encourage their constituents to sustain the move towards digitisation of payments and switching over from cash to non-cash payments.