To encourage people to deposit valid currency notes in banks, the Reserve Bank of India today said bank account holders 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.
“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,” the RBI said in a late evening circular.
“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 â¹ 2000 and â¹ 500 are to be issued for such withdrawals,” it further said.
After the withdrawal of legal tender character of old Rs 500/1000 notes from November 9, a Rs 24,000 per week limit (including from ATM) on withdrawal has been put in place. Additionally, RBI has also allowed banks operating currency chests to operate Chest Guarantee Scheme for Specified Bank Notes (SBNs)–CGSS if they have additional space.
However, they can do so if the additional space in their existing currency chest or additional storage space at the same centre which is nearly as safe and secure as that of a currency chest. Requisite approval for operating CGSS will be granted by RBI Regional Office concerned, on receipt of request from any bank, it said.
On Sunday, RBI had allowed banks to park such currencies at currency chests at the district level so as to decongest the storage facility. A currency chest operating at the point to be called Designated Chest (DC) will be required to operate a separate vault — to be named Chest Guarantee Vault (CGV) — as an extended arm of it, it had said.
The Central bank today said that banks have received Rs 8,44,982 crore worth of old high denomination currency upto November 27, Rs 33,948 crore of which was exchanged with valid notes.
“Banks have reported that such exchange/deposits effected from November 10, 2016 upto November 27, 2016 amounted to â¹ 8,44,982 crore (exchange amounted to â¹ 33,948 crore and deposits amounted to â¹ 8,11,033 crore),” RBI said.
“They have also reported that the public have withdrawn, during this period, â¹ 2,16,617 crore from their accounts either over the counter or through ATMs,” it said.