Government Tightens Note Exchange Norms, Lowers Limit To Rs. 2,000

The government last week surprised citizens by announcing demonetisation of Rs 500 and Rs 1,000 notes.

New Delhi: With the shock demonetisation move in the middle of marriage and sowing seasons causing hardships, the government on Thursday eased restrictions on cash withdrawals by farmers and families with upcoming weddings but more than halved the limit at Rs. 2,000 for exchange.

Economic Affairs Secretary Shaktikanta Das said now families preparing for a wedding can withdraw up to Rs. 2.5 lakh from their bank accounts giving PAN details and self declaration.

However, with effect from Friday, individuals can exchange invalid Rs. 500 and 1,000 notes totalling Rs. 2,000, as against Rs. 4,500 earlier, only once till December 30.
Besides, farmers who have taken crop loan or have ‘kisan’ credit cards can withdraw Rs. 25,000 per week. Also those who have received payments through RTGS or cheque deposits in KYC-compliant bank accounts can withdraw an additional Rs. 25,000 a week. This takes the total cash withdrawal limit for farmers from KYC complaint bank accounts to Rs. 50,000 per week.

Prime Minister Narendra Modi had on November 8 surprised citizens by announcing demonetisation of Rs. 500 and Rs. 1,000 notes and since then large number of seemingly unending queues before banks and post offices are seen in order to exchange these currencies.

Select bank branches across metro cities have already started applying indelible ink on the right hand index finger of people who are exchanging notes.

“There is enough cash available with the government. This (reducing currency exchange limit) is mainly to enable larger number of people to reach the counter… We find that many people are not able to reach the counter and same persons are visiting the counter multiple times and other people are not getting the benefits,” Mr Das said.

Mr Das said ever since the demonetisation announcement was made, a lot of representations have come to the Prime Minister and Finance Minister Arun Jaitley to ease withdrawal norms for wedding purposes.

“It has been decided that for wedding ceremonies which are going on, up to Rs. 2.50 lakh will be permitted to be drawn from the bank account… and that has to be drawn one person per marriage and can be drawn either from the account of the father or the mother or the account of either of the boy or girl, who are getting married, and these accounts naturally will have to be KYC compliant,” he said.

Mr Das said PAN details would have to be mentioned for such withdrawals and a self declaration also will be obtained that the money has been drawn only from one account.