RBI relaxes cash withdrawal limits from bank accounts

The Reserve Bank of India (RBI) on 28 November 2016 relaxed the cash withdrawal limit from the bank accounts with an aim to spur the deposits.

The depositors, who have made the deposits in the current legal tender notes, can now withdraw that amount over and above the weekly limit of Rs 24000.

This move comes as a relief for certain depositors who were hesitating to deposit their monies into bank accounts due to the current limits on cash withdrawals from accounts.

The withdrawals will be available in higher denominations bank notes of Rs 2000 and Rs 500. The move will also encourage small businesses and shopkeepers to deposit cash in legal tender which they can withdraw at the same point of time.

Background
The Union Government on 8 November 2016 banned the legal tender of Rs 1000 and Rs 500 currency notes. Since then, this demonetisation plan has fetched Rs 8.1 lakh crore in bank accounts. On the other hand, around Rs 34000 crore had been exchanged till date.

In terms of total cash withdrawals, around Rs 2.16 lakh crore had been withdrawn as cash till date as per RBI record of 27 November 2016.