FM raises exchange limit from Rs 4000 to Rs 4500; cash withdrawal limit to Rs 2500

New Delhi: With public anger rising across the country over limited cash availability, the government tonight eased key restrictions including raising daily withdrawal limit from bank counters and ATM as well as hiking the amount of old and now defunct currency notes that can be exchanged.

To augment cash supplies, newly printed hard-to-fake Rs 500 notes were also released in market. After a review by Finance ministry, the limit of old and now defunct Rs 500 and Rs 1000 rupee notes that can be exchanged for freshly minted Rs 2000 and new Rs 500 notes was increased from Rs 4000 to Rs 4500 per day.

Cash withdrawal limit at ATMs was hiked to Rs 2,500 from Rs 2,000 a day.

The weekly limit of Rs 20,000 for withdrawal from bank counters has been increased to Rs 24,000. The maximum limit of Rs 10,000 per day on such withdrawals has been removed, the ministry said in a statement.

"Banks have been advised to increase the issuance and use of mobile wallets and debit/credit cards as also to provide them to those customers and establishments not having access to these non-cash means of payment," it said.

Also, the last date for submission of the annual life certificate for the government pensioners which is to be submitted in November every year has been extended up to January 15, 2017.

Finance Ministry this evening reviewed the position regarding availability and distribution of notes of all denominations in different parts of the country. Instructions have been issued to the banks and post offices to ensure proper distribution of all notes, including those of smaller denominations, up to the last mile through mobile banking vans and Banking Correspondents (BCs) to ease pressure.

While the old Rs 500 and Rs 1000 currency notes were demonetised from the midnight of November 8, a brand new Rs 2000 note was introduced on November 10.

"In the first four days (from November 10th to 13th , upto 5 pm ), about Rs 3 lakh crore of old Rs 500 and 1000 bank notes have been deposited in the banking system and about Rs 50,000 crores has been dispensed to customers by either withdrawal from their accounts or withdrawal from ATM's or by exchange at the counter," the statement said.

Within three four days, the banking system has handled about 21 crore transactions. Further based on the review of the reports received from the States, banks and other sources, the ministry decided that continuous coordination is to be done with RBI, banks and post offices to make all denomination notes available at all locations.

"Instructions have been given to the banks and post offices to ensure proper distribution of all denomination notes. Banks have also been especially advised to ensure the availability and distribution of small denomination notes," it said.

Also, Chief Secretaries of the states have been asked to identify the rural pockets where availability of cash has been a problem and provide all support to ensure the last mile distribution of small denomination of notes is done through mobile banking vans and Banking Correspondents (BCs), the statement said.

"It has been reported that certain business houses viz. hospitals, caterers , tent houses etc. are not accepting Cheques/Demand Drafts and online payment transfer from customers. It is advised that in such cases customer can make a complaint to the concerned District Magistrates/District

Administration for action against such establishments," the statement said. All banks have been advised to arrange mobile banking vans to the extent possible at major hospitals to carry out emergency banking transaction for patients.

Banks have also been asked to make arrangements for separate queues for senior citizens and physically handicapped. Separate queues will also be arranged for exchange of cash to cash and transactions against bank accounts.

"State governments have been requested to facilitate opening of new bank accounts as a part of financial inclusion programme," the statement added.