Subsequent to demonetisation, RBI had implemented a withdrawal limits on all savings and current accounts. Currently, these limits stood at Rs. 24,000 per week for savings accounts and Rs. 1 lakh per week for current accounts. Now the RBI has announced that the Rs.1 lakh per month limit on Current Accounts has been removed with immediate effect. However, the RBI announcement also suggested that banks could keep their own limits in place for current accounts at their discretion.
The removal of withdrawal restrictions is expected to help small businesses that had been hardest-hit by the notes ban announcement restart normal daily operations. The main reason for the withdrawal limits was the scarcity of new banknotes after an estimated 86% of India’s currency in the form of Rs. 500 and Rs. 1000 notes were withdrawn. The scarcity was mainly caused by the delay in getting the new notes into circulation once they had been printed.
The Reserve Bank of India has also hinted that the current limit on savings bank account withdrawals is being looked into and it might be re-evaluated at a later date. RBI has also urged that banks promote various non-cash payment methods such as digital payments through debit cards and Internet banking to their customers so as to ensure that the goal of cashless India becomes a reality and the scarcity of bank notes does not adversely affect citizens as well as businesses.