Note ban: Relief for farmers; exchange limit reduced

New Delhi: In a bid to ease the problems caused in rural areas by demonetisation of Rs 500 and Rs 1000 notes, economic Affairs Secretary Shaktikanta Das said on Thursday that farmers can now withdraw Rs 25,000 in a week.

Government has decided to permit farmers to draw up to Rs 25,000 per week against crop loans sanctioned and credited to their accounts, Das said in a press conference on the issue of demonetisation.

"Farmers who sell their produce in the mandis can withdraw upto 25,000 from their verified account," he stated.

The time limit for paying crop loan insurance premium will be extended by 15 days, he added.

Moreover, traders in agricultural mandis will now be permitted to draw Rs 50,000 in cash per week to pay for sundry expenses like wages, the Economic Affairs Secretary announced.

Das also announced that the government has lowered the exchange limit for now-defunct 500 and 1,000 rupee notes to Rs 2,000 from the existing cap of Rs 4,500, effective Friday.

Among other measures, it has allowed up to Rs 2.5 lakh cash withdrawal from bank account of a bride or groom or their parents for a marriage during the ongoing wedding season.

"To enable larger number of people to get benefit of over-the-counter exchange of Rs 500 and Rs 1,000 notes, the existing limit of Rs 4,500 will be reduced to Rs 2,000 with effect from tomorrow," Economic Affairs Secretary Shaktikanta Das told reporters.

The over-the-counter exchange of Rs 500/1,000 in return of new currency will be available "once per person till December 30".

"This will enable larger number of people to exchange notes. There is no cash shortage and enough cash is available," he said.

The decision comes a day after the government directed banks to put indelible ink mark on the right index finger of persons to screen them from using the exchange facility more than once.

Prime Minister Narendra Modi had on November 8 demonetised Rs 500 and Rs 1,000 notes in his bigger war against black money, terror financing and counterfeit notes.

Since then a lot of representations have come to Prime Minister and Finance Minister to ease withdrawal norms for wedding purposes.

"This has been considered by the government and decided that for wedding ceremonies, up to Rs 2.5 lakh will be allowed to be withdrawn from account if father or mother or the bride and groom," Das said.

He said the account has to be KYC compliant and self declaration has to be given to the bank. The Rs 2.5 lakh can be withdrawn from only one account.

Also, Central government employees upto Group C category will be allowed to withdraw their salary in advance to ease queues in banks, the Economic Affairs Secretary added.

“Areas with cash shortage are being catered to as well. A task force to address recaliberation of ATMs will submit its report soon,” Das said.

The Opposition had on Wednesday assailed the government in Parliament over the ban on Rs 500 and Rs 1000 notes, claiming that this move had only hurt the poor while the rich went-scot free. Opposition parties also condemned the implementation of the move, stating it had caused much hardship to ordinary people.

On Wednesday, the 8th day after Prime Minister Narendra Modi announced the ban on notes of Rs 500 and Rs 1000, people lined up in large queues outside ATMs and banks, seeking to withdraw or deposit money. There have been incidences of deaths, as well as fights erupting outside several banks and ATMs over the past few days.