Note ban: Exchange limit cut, fuel pumps to give cash

New Delhi: As chaos and cash crunch continued for the eighth consecutive day, the government on Thursday announced new measures to ease the pain, but also decreased the limit of money people can exchange.

Friday onwards people will get only Rs 2,000 by exchanging old Rs 500 and Rs 1,000 notes at bank counters instead of the earlier limit of Rs 4,500. But, to reduce the long queues outside banks and ATMs, it has been decided that people can get cash, up to Rs 2,000 per day, by swiping debit cards at select petrol pumps where the POS machines are of the State Bank of India.

This facility will be available at around 2,500 petrol pumps to begin with, and will eventually be extended to 20,000 petrol pumps. This move followed after IOC, BPCL and HPCL had a meeting with SBI chairperson, Arundhati Bhattacharya, on Thursday.

The cap set on money received through exchange means that each individual can now exchange old notes only once till December 30. While there is no limit on the amount deposited in bank accounts, the cash rendered will be Rs 2,000 only.

Indelible ink-mark on fingers will ensure that the same people don’t keep queuing up to exchange old notes. This move is the government’s attempt to shorten the long queues outside banks.

Government on Thursday also permitted families preparing for weddings to draw Rs 2.50 lakh in cash from their bank accounts. This limit will apply separately to the girl’s family and the boy’s. A self-declaration will have to be submitted that only one person from one family is drawing money. Finance ministry warned that any misuse of this facility will invite action based on the self-declaration and other details.

This move evoked sharp criticism from the Opposition, with Delhi chief minister Arvind Kejriwal saying Rs 2.50 lakh is an insufficient amount for a wedding. He asked whether the finance minister had spent only Rs 2.5 lakh for his daughter’s wedding. Mr Kejriwal alleged that BJP sympathisers are spending Rs 500 crore on the marriages of their daughters, while common people are being asked to make do with only Rs 2.5 lakh.

Mr Jaitley on Thursday ruled out roll back of demonetisation, saying the government is firm on cleansing politics and the economy of black money and corruption. He also ruled out the possibility of reintroduction of Rs 1,000 note any time soon. Mr Jaitley said that 22,500 ATMs were re-calibrated on Thursday to ease pressure on banks.

As per the decision taken by the finance ministry, Central government employees up to Group C, and equivalent levels in defence and paramilitary forces, railways and Central public sector enterprises, will be given the option to draw salary advance up to Rs 10,000 in cash. To help farmers have cash in the crucial rabi season, the government has permitted them to draw up to Rs 25,000 per week in cash from their KYC compliant accounts. This facility also applies to Kisan Credit Cards (KCC). The last date for payment of crop loans, insurance premiums has also been extended by 15 days.

A person has to submit PAN card as well as identity and residence proof for an account to be KYC (Know Your Customer) compliant. Except Jan Dhan accounts, nearly all bank accounts are KYC compliant.

Traders registered with APMC markets or mandis have been permitted to withdraw Rs 50,000 per week to enable them to pay wages and facilitate easy loading, unloading and other activities at the mandis.

Prime Minister Narendra Modi again reviewed the situation arising out of withdrawal of old currency notes of Rs 500 and Rs 1,000 with officials of the PMO and the finance ministry on Thursday.