50-day window to deposit junked notes ends

The 50-day deadline to deposit the junked Rs 500/1,000 notes in banks came to an end today but clarity still eludes on whether the weekly withdrawal limit of Rs 24,000 would be eased or not.

Even on the last day of the 50-day window, queues were seen at bank branches and ATMs.

Finance Minister Arun Jaitley said that RBI has enough currency and situation of cash supply has improved significantly. Asked when curbs on withdrawal would be removed, Jaitley said when the decision will be taken, it will be made public. People still have time to exchange the currency notes at designated RBI counters till March 31 after giving valid reasons for not depositing defunct notes in their accounts by December 30.

The government has come out with an ordinance making possession of old Rs 500/1,000 notes beyond a specified limit for numismatic purposes illegal and punishable.

Prime Minister Narendra Modi in a surprise announcement on November 8 declared the Rs 500 and 1,000 notes invalid. The banks started accepting deposits in scrapped notes from November 10. However, very few ATMs opened on November 11, as most of the machines had to be recalibrated for dispensing the new Rs 2,000 and Rs 500 notes.

Saddled with cash crunch, banks resorted to rationing of valid currency notes. Even on the last day, few banks were rationing Rs 5,000 per person against the withdrawal limit of Rs 24,000 per account in a week. Although the overall situation at banks has improved, ATMs still have to do some catching up. Many cash vending machines are still out of cash. Bankers believe that restrictions on withdrawal of cash from banks and ATMs are likely to continue beyond December 30.

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The government and the RBI has not specified when the restrictions will be withdrawn. Finance Secretary Ashok Lavasa had said the withdrawal cap would be reviewed after December 30.