RBI relaxes withdrawal limit of cash from bank deposits

November 28, 2016 23:25

To encourage people to deposit valid currency notes in banks, RBI today said bank customers would be able to withdraw deposits made in current legal tender notes beyond the current limits, a move aimed at increasing

currency circulation in system.

For example, if someone deposits valid legal tenders (Rs 2,000, Rs 500, Rs 100, Rs 50, Rs 20, Rs 10, Rs 5) of Rs 4,000, the withdrawal limit for that person would rise by Rs 4,000 over and above weekly withdrawal limit of Rs 24,000.

For current accounts, the withdrawal limit is Rs 50,000 a week for small traders.

In a late evening circular, the Reserve Bank said that it has been reported that "certain depositors are hesitating" to deposit their monies into bank accounts in view of the current limits on cash withdrawals from accounts.

"As it is impeding active circulation of currency notes, it has been decided, on careful consideration, to allow withdrawals of deposits made in current legal tender notes on or after November 29, 2016 beyond the current limits;

"Preferably, available higher denominations bank notes of Rs 2000 and Rs 500 are to be issued for such withdrawals," the Reserve Bank said.

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