RBI relaxes withdrawal limit but doesn't say by how much

The Reserve Bank of India (RBI) relaxed the withdrawal limit from bank deposit accounts to ensure more liquidity with people, but did not say by how much.

Currently people can withdraw up to Rs 24,000 in cash from ATMs, over-the-counter at the banks, from post offices, and from point of sale (PoS) centres. 

While the RBI said that the withdrawal limit had been eased, it didn't say by how much. 

The central bank said that it had come to its notice that people were hesitant in depositing money into their account because of a limit on how much could be withdrawn. 

"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. 

"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 Rs 2,000 and Rs 500 are to be issued for such withdrawals," it added. 

The government demonetized Rs 500 and Rs 1000 notes with the view to clampdown on black money and undisclosed income in the economy. As a measure to encourage the public to declare their income, the government set a December 30 deadline to allow them to deposit money into their account and come clean. 

Since the decommissioning drive was set into motion on November 8, the banks have received over Rs 8.11 lakh crore in deposits out of the Rs 14 lakh crore that was taken out of circulation. The banks have also exchanged over Rs 33,000 crore over the counter for new notes and over Rs 2 lakh crore has been withdrawn from the accounts.