How the Ministry of Finance is ensuring last-mile distribution of all denominations of bank notes in semi-urban areas


The Union Finance Ministry on Monday reviewed the position of the availability and distribution of all denominations of bank notes. Between November 10th and the 13th, about Rs 3 lakh crore in old Rs 500 and Rs 1,000 bank notes were deposited in the banking system, while about Rs 50,000 crore were withdrawn by customers.

The Ministry of Finance ensures the availability of notes of all denominations at all locations by coordinating with the RBI and giving instructions to banks and post offices. Banks have also been especially advised to ensure the availability and distribution of small denomination notes.

Moreover, to ensure the availability of cash and the last mile distribution of small denomination notes in rural pockets, the chief secretaries of the states provide support to the banks and post offices through banking vans and correspondents.

Hospitals, caterers and tent houses are reportedly not accepting cheques/demand drafts and online payment transfers from customers. Customers, in such cases, are advised to make a complaint to the concerned District Magistrates/District Administration for action against such establishments.

Financial Inclusion

The Government of Assam took a very modest step to carry out emergency banking transactions for patients in hospitals. With the support of banks and state government staff at certain hospitals, the Government arranged mobile banking vans.

Banks have also been advised to make arrangements for separate queues for senior citizens and 'Divyang' persons. Separate queues will also be arranged for the exchange of cash for cash and transactions against bank accounts.

The Government of Arunachal Pradesh also seems to be aggressive in terms of financial inclusion in remote areas. The government has made arrangements for cash deposits/withdrawal and the opening of new bank accounts with the help of banks and state government staff.

“State governments have been requested to facilitate the opening of new bank accounts as a part of the financial inclusion programme,” stated the Ministry of Finance.

Issuance of new currency notes

The Ministry announced that the issuance of the new series of Rs 500 has already commenced. Banks have been advised to increase the Business Correspondents limit of dispensing cash to Rs 2,500 for withdrawal from bank accounts.

The exchange limit over the counter has been increased from the existing Rs 4,000 to Rs 4,500. The Ministry further added that banks have been advised to increase the cash withdrawal limit at ATMs from the existing Rs 2,000 to Rs 2,500 per day in the recalibrated ATMs; other ATMs will continue to dispense Rs 50 and Rs 100 notes until they are recalibrated.

The weekly limit of Rs 20,000 for withdrawal from bank accounts has been increased to Rs 24,000. The limit of Rs 10,000 per day has been removed entirely.

The government also advises banks to increase the issuance and use of mobile wallets and debit/credit cards, as well as to provide them to those customers and establishments who do not have access to these non-cash means of payment.

“The last date for submission of the annual life certificate for the Government Pensioners, which is to be submitted in November every year, has been extended to January 15, 2017,” said the Ministry.


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