RBI had turned down Election Commission's request to increase withdrawal limit for candidates.
The Election Commission has asked candidates in five states -- where assembly elections are being held -- to open current accounts so they won't have to face problems in withdrawing money for poll expenditure. Earlier, the Reserve Bank of India had refused to enhance the cash withdrawal limit for election candidates despite a request from the poll commission. But today, the central bank removed cash withdrawal limits from current accounts, cash credit accounts and overdraft accounts with immediate effect. The commission's advisory came immediately after.
Earlier, the Election Commission had instructed candidates to open a separate bank account for elections. A majority of candidates had opened current accounts.
Last week, the commission had written to the central bank, asking that the weekly cash withdrawal limit, which was Rs. 24,000, be increased to Rs. 2 lakh for candidates up for election in the five states. The bank had pointed out that though the government allows candidates to spend above Rs 20 lakh, given the withdrawal limits, they would be able to spend less than Rs 1 lakh before the elections begin.
The expenditure limits are capped at Rs 28 lakh for Punjab, Uttarakhand and Uttar Pradesh and Rs. 20 lakh for Manipur and Goa.
The central bank, however, turned down the Commission, saying a special provision was not possible at the moment. The Commission had hit back, saying the RBI apparently "has not realised the gravity of the situation". "It is reiterated that it is the constitutional mandate of the commission to conduct free and fair elections and to provide level playing field to all candidates," the Commission said, insisting that its directions be complied with.
Assembly elections in Uttar Pradesh, Punjab, Goa, Uttarakhand and Manipur begin on February 4. The results will be announced on March 11.