MUMBAI: Eighty five days after demonetisation was announced on November 8, savings account holders will be allowed to withdraw up to Rs 24,000 from automated teller machines in one go while all withdrawal limits have been removed for current account holders.
Easing ATM withdrawal limits with effect from February 1, the RBI said that the Rs 24,000 weekly withdrawal limit on savings account will continue for now but is under review to be scrapped in near future.
In a circular issued to all banks, the RBI said that all limits on withdrawal have been removed for current accounts, cash credit accounts, and overdraft accounts with immediate effect.
Small businesses men who are issued ATM cards for their current accounts can withdraw all their cash requirements from ATMs. However, this would be subject to the prudential limit fixed by each bank for its customers.
The removal of limits on current accounts will end the RBI's stand-off with the Election Commission. RBI had earlier said that it could not allow a higher limit of Rs 2 lakh per week for candidates as requested by the commission. Since elections expenditure is not a personal expenditure it would be made out of current accounts which have no limits.
"For most of our customers the withdrawal limits have been typically Rs 18,000 before demonetization and Rs 10,000 for customers of other banks," said Rajeev Anand, executive director, Axis Bank. This would mean that for most customers the situation would now be similar to what it was before November 8.
"The cash situation has improved and over 80% of the ATMs are now operational most of the time," said Anand.
According to Navroze Dastur, managing director at NCR India, the largest ATM company in the country, there has been a change in customer behavior. "Now Rs 1,900 is the magic number that everyone tries to withdraw from ATMs. Withdrawing this amount gives them three notes of Rs 500 denomination and four of Rs 100". Once the ATM runs out of notes of Rs 500 and Rs 100 denomination, activity immediately drops as customers are unwilling to accept notes of Rs 2,000 denomination.
While there is no limit for current account holders, and a limt of Rs 24,000 for savings accounts, the RBI has said that banks can have their own operating limits as was the case before November 8, 2016, subject. The central bank also said that banks should encourage all to sustain the movement towards digitisation of payments and switching over of payments from cash mode to non-cash mode.