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RBI: ATM withdrawal limit raises to Rs 10,000 per day
Cash-starved citizens can heave a sigh of relief. The RBI has enhanced cash withdrawal limits from ATMs and current accounts with immediate effect.
MUMBAI: Cash-starved citizens can heave a sigh of relief. The RBI has enhanced cash withdrawal limits from ATMs and current accounts with immediate effect.
Customers can now withdraw Rs 10,000 per day from automated teller machines against Rs 4,500 earlier, and current account holders can take out Rs 1 lakh a week at bank branches; their earlier limit was Rs 50,000.
But the weekly withdrawal limit of Rs 24,000 from savings accounts will continue.
HIGHLIGHTS
- The RBI has enhanced cash withdrawal limits from ATMs and current accounts.
- Daily withdrawal limit from ATMs has been raised to Rs 10,000 from the existing Rs 4,500.
- Limit on withdrawal from current account increased to Rs 1,00,000 per week.
The RBI's biggest relaxation on cash withdrawals, communicated to all banks on Monday, comes 70 days after Prime Minister Narendra Modi announced demonetization of Rs 500 and Rs 1,000 notes and limits were placed on cash withdrawals.
Banks have responded to the move positively. "The overall limits have not been changed. So account holders will be making fewer trips to the ATM for withdrawal," said Soumya Kanti Ghosh, chief economic advisor, SBI.
A senior official with a private bank said that he did not foresee any problems because of the higher limits. It could also mean less pressure on bank branches, but banks would still want to keep a watch on account holders' behaviour to learn about the impact of the new announcement.
ATM operators have a different story to tell. They say that they are facing a strange problem where even though only 60-70% of cash requirements are being met, customers are not withdrawing from ATMs. These machines stock notes of only Rs 2,000 denomination since Rs 500 notes are still in short supply.
"The supply of currency in absolute terms has definitely improved, but the challenge now is the availability of lower denomination notes, like Rs 500.
We have a large number of ATMs that are stuffed with the Rs 2000 currency notes and there are no transactions at these ATMs," said Himanshu Pujara, MD, Euronet Services India-one of the companies that manage ATMs in the country.
"The average withdrawal per cardholder was around Rs 3,500. What is the point of increasing the withdrawal limit when only 60-70% of the ATMs are getting money?
If supply of cash does not improve, ATMs will dry up sooner," said Mani Mamallan, founder and MD of Electronic Payment and Services, another ATM operator.
