In a big relief to people and small businesses, RBI on Monday announced lifting of restrictions on daily withdrawal of money from ATMs and from current accounts but the weekly limit of Rs 24,000 on savings bank accounts will continue.
The Reserve Bank also promised to review the weekly limit in the near future depending on the pace of remonetisation.
On a review of the pace of remonetisation, it has been decided to partially restore status quo ante, RBI said adding, cash withdrawal limit from ATMs stands withdrawn from February 1, 2017. Banks, however, have been asked to fix their own limits, as has been the case before November 8, 2016, the day government scrapped high denomination currency notes of Rs 500 and 1,000.
RBI has also removed all limits on cash withdrawals from current accounts/ cash credit accounts/ overdraft accounts with immediate effect. The limits on Savings Bank accounts will continue for the present and are under consideration for withdrawal in the near future, it said.
It further said that banks have been "urged to encourage their constituents to sustain the movement towards digitisation of payments and switching over of payments from cash mode to non-cash mode."
Government and RBI had imposed limits on withdrawal of money from ATMs and bank branches in view of currency shortage following demonetisation. These limits, however, were gradually eased with RBI pumping in new notes of Rs 500 and Rs 2000. The Reserve Bank of India has also geared up to introduce new Rs 1,000 banknotes in a few months time. It was also reported that the RBI may allow citizens another chance to exchange the scrapped Rs 500 and Rs 1,000 notes. However, the sum for any such exchanges may have certain limitations.