RBI Lifts Limits On Withdrawals From ATMs, Current Accounts

New Delhi: The Reserve Bank of India today removed limits on cash withdrawals from current accounts, cash credit accounts and overdraft accounts with immediate effect. The restrictions on ATM withdrawals will go from Wednesday, February 1. But restrictions on savings bank accounts will continue for now - meaning a savings account holder can withdraw Rs 24,000 in a week, but this money can be withdrawn from an ATM in one go. The central bank said it was considering the removal of limits from savings bank accounts "in the near future".

"Limits placed vide the circulars cited above on cash withdrawals from Current accounts/ Cash credit accounts/ Overdraft accounts stand withdrawn with immediate effect," the Reserve Bank said in a circular on Monday.

The circular added that the banks may, however, "at their discretion" impose their own operating limits as was the case before November 8.

Earlier, Union Finance Minister Arun Jaitley has said the central bank will remove restrictions on cash withdrawals only after assessing market situation and the government will not interfere in the process.

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The ban on 500 and 1000 rupee notes, which came within a few hours of Prime Minister Narendra Modi's surprise announcement on November 8, has been followed by a huge cash crunch as nearly 86 per cent of currency suddenly went out of circulation. With the available notes being rationed, over the next few weeks, block-long queues were seen at banks and ATMs.

As the situation eased with the new notes of Rs 500 and Rs 2000 coming into circulation, the RBI is relaxing the cash withdrawal rules in phrases.

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In its current circular, the Reserve bank said the banks needed to push for non-cash transactions. "The banks are 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," the circular read.