No limit on withdrawing money from savings account

Mumbai: All limits placed on cash withdrawals from savings bank account post demonetisation of high denomination currency notes ended on Monday.

Ever since the government announced a surprise ban on Rs 500 and Rs 1,000 notes constituting 86.9 per cent of the value of total currency in circulation and placed caps on daily and weekly withdrawal limits, the Reserve Bank of India (RBI) has been relaxing these restrictions in phases taking into account the pace of remonetisation.  

Initially, the Reserve Bank removed restriction on cash withdrawal limit from current, cash credit and overdraft accounts effective January 31, 2017. However, the limits on cash withdrawal from savings bank accounts remained in place.

After reviewing the progress of remonetisation, RBI in its last monetary policy meeting held on February 8, 2017 decided to completely remove the restrictions on cash withdrawal limit from savings bank account in two phases.

Accordingly, customers were allowed to withdraw up to Rs 50,000 per week from their savings bank account starting February 20, 2017 from an earlier limit of Rs 24,000 per week. “Effective March 13, 2017, there will be no limits on cash withdrawals from Savings Bank accounts,” RBI said.

The demonetisation of high value currency notes was announced on November 8, 2016 with an aim to battle corruption, black money, counterfeit currency, terror financing and greater digitisation of the economy. In its preliminary assessment of the macro-economic impact of demonetisation, the RBI said the note ban had impacted various sectors in varying degrees, but the adverse impact was transient and felt mainly in November and December 2016.

“The impact moderated significantly in January 2017 and dissipated by and large by mid-February, reflecting  the fast pace of remonetisation. The latest CSO estimates suggest that the impact of demonetisation on gross value added growth was modest,” the RBI said in a report released last week.