Now, you can withdraw up to Rs 10,000 in a day from an ATM

The Reserve Bank of India (RBI) on Monday relaxed the per day cash withdrawal limit from automated teller machines (ATM) to Rs 10,000 per card, from Rs 4,500 currently. The weekly limit, however, remains unchanged at Rs 24,000.

Current account holders can now withdraw up to Rs 1 lakh per week. Earlier, they were allowed to withdraw only up to Rs 50,000. This facility has been extended to overdraft and cash credit accounts as well.  

RBI had imposed these limits in November after the government banned Rs 500 and Rs 1,000 notes. The withdrawal limits are unlikely to be removed completely till RBI supplied the economy with sufficient amount of new notes, analysts said.

The daily withdrawal limit has been changed a number of times earlier. On November 8 — the day Prime Minister Narendra Modi announced the note ban — the central bank restricted daily withdrawal to Rs 2,000. It was increased to Rs 4,500 a few days later. This was quickly rolled back to Rs 2,000; then increased to Rs 2,500 per day. From December 30, the daily limit was fixed at Rs 4,500.

However, in all these changes, the weekly withdrawal limit was not changed — unless one was withdrawing money for special purposes such as marriage. A bank customer had to issue a cheque to withdraw higher amounts of cash from bank counters.

In a number of banks, the daily withdrawal limit was Rs 10,000 a day even before the note ban started. ATMs, too, were programmed to dispense no more than Rs 10,000. So, for some, the cash regulations had returned to normal, but for the weekly withdrawal limit.

Cash availability, too, had improved, with more new Rs 500 and Rs 2,000 notes coming into the system.

According to a Bank of India executive, the supply of currency notes (of various denominations) from December 2016 had increased substantially, leading to improved availability at branches and ATMs. While dispensing currency notes, the bank’s own customers were the priority, he added.   

Compared to the last month, more currency notes were being sent to semi-urban and rural networks, said the banker.

The expanded withdrawal limit would help banks as well as customers to bring down the transaction cost paid to switch providers. The charges associated with ATM usages were waived off by RBI till December 30.

Technically, from January 1, banks were free to charge their customers if they use ATMs for more than five times a month. But given the paucity of cash, some banks had extended the ATM fee waiver after January, deciding to absorb the cost themselves.  Now the charges can be reintroduced.

The increase in current account withdrawal would greatly aid small businesses as well as companies that have to pay wages to employees in cash. Many small units had to be closed down as owners could not pay in cash. Now, those units can hope to be back in business, as usual, bankers added.

Budget Date Decided Much In Advance Of Poll Schedule: Arun Jaitley

Refuting the Opposition's allegation, Mr Jaitley said the date for presenting the budget was decided much earlier, before the announcement of Punjab polls and it would be wrong to say the date was fixed keeping Punjab elections in view.

Finance Minister Arun Jaitley on Sunday said the date for presenting the Union Budget on February 1 was decided much in advance of the EC's announcement of Punjab polls three days later, dismissing Opposition allegation that the budget was scheduled keeping in view the state elections.

He said there was a practice to present the budget on February 28 but this year it would be presented on February 1.

"The idea is to pass the Finance Bill by March 31, so that next year's expenses could be started from April 1," he said.

Refuting the Opposition's allegation, Mr Jaitley said the date for presenting the budget was decided much earlier, before the announcement of Punjab polls and it would be wrong to say the date was fixed keeping Punjab elections in view.

Political parties including Congress, Left, Samajwadi Party and BSP have voiced reservations against presenting the Budget just three days ahead of the Punjab polls as they feel the budget may be used to announce sops to influence voters.

Mr Jaitley also played down the trouble people faced due to the sudden move by the Union government on November 8 to demonetise high-value currency notes, saying gone were the days when people were seen standing in long queues outside banks.

"Now adequate new currency is available with banks as well as in the market," he said.

Lauding the work done by Prime Minister Narendra Modi in the past three years, Jaitley said "surgical strike" and demonetisation have been largely praised across the world since such steps strengthen the nation's internal security.

VISIT - http://www.wealthresearch.in/