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Withdrawal restrictions likely to goaway by Feb-end

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With the cash crunch situation easing,the Reserve Bank of India(RBI)may do away with the weekly with drawal limits from banks as well as ATMs by the end of next month, bankers said.

The RBI had recently raised the ATM withdrawal limit to Rs.10,000 a day but maintained the weekly capat Rs.24,000 for saving account and Rs.1lakh for current accountholders.

"I think there strictions on withdrawal by RBI should be completely lifted by February end or by first half of March as cash situation is easing gradually," Bank of Maharashtra ExecutiveDirectorRKGuptasaid.

It is entirely RBIs decision and the central bank would decide after making holistic assessmentofthesituation,hesaid.

According to SBIs research report Ecow rap, "By the end of February,78-88 percent of the currencycould be back in the system under the best cases cenariointerms of anoptimalcurrencydistribution(moresmalldenomination notes),"thereportsaid,addingthat"itseems withinthenexttwomonthsthingswouldbe prettyclosetonormal." Anotherseniorpublicsectorbankofficial saidthesituationiseasinganditisamatterof weekswhenthecurbonwithdrawalgetseased.

"Myhunchisthatitshouldhappenbefore endofthecurrentfiscal,"theofficialsaid, adding,RBIhasbeenprogressivelyeasingthe curb.

TheRBIhadearlierincreasedthedaily withdrawallimitfromATMstoRs.4,500from Rs.2,500effectiveJanuary1,justadayafter50daydemonetisationperiodended.

Meanwhile,RBIGovernorUrjitPatelcould notsetatimeframebeforetheStanding CommitteeonFinanceforreturnofnormalcy inthebankingsystemevenasthecentralbank assertedthat~9.2lakhcroreor60percentof demonetisedcurrencyhasbeenreplaced.

InasurprisemoveonNovember8,Prime Minister Narendra Modi had announced demonetisationofold~500and~1,000notes.

Followingthedecision,theRBIhadput restrictionsonwithdrawalofcashfrom ATMsaswellasfrombankstodealwith shortageofnewhighdenominationcurrencynotes.ThisledtolongqueuesatATMs andbankbranches.

All over the country,the banks had to deal with hugerush ofpeoplewhothrongedtheir branchestodepositjunkednotes.Thedeadline fordepositingoldnoteswithbanksendedon December30.

The RBI had recently raised the ATM withdrawal limit to Rs.10,000 a day but maintainedtheweeklycapat~24,000for savingaccountand~1lakhforcurrent accountholders
Business Standard New Delhi,27th January 2017

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