Govt issues new guidelines on cash withdrawals.

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Centre issues new guidelines on cash withdrawals, new measures for the benefit of common man; Says no need for panic, not to hoard currency
Centre issues new guidelines on cash withdrawals, new measures for the benefit of common man; Says no need for panic, not to hoard currency
Centre issues new guidelines on cash withdrawals, new measures for the benefit of common man; Says no need for panic, not to hoard currency

To ease the burden of demonetization on the common man, the government on Thursday went on an overdrive and brought in more measures, allowing families preparing for marriages to withdraw up to Rs 2.5 lakh, and reducing the existing limit of Rs 4,500 for exchange of old notes to Rs 2,000.

The government has also allowed farmers to withdraw up to Rs 25,000 from bank accounts in their names that are compliant with personal data declaration norms. This is meant to ensure that the demonetization does not adversely impact the winter rabi crop and farmers have enough money to take care of their input cost like procuring seeds and fertilisers.

It also raised the weekly limit for agricultural traders who will now be allowed to withdraw Rs 50,000 a week so that farmers get the price for their produce and the vegetables reach the big markets in the cities. The time limit for payment of crop insurance premium for farmers is also extended by 15 days.

The government also permitted Central staff up to Group C categories to withdraw up to Rs 10,000 against their November salary. Stressing that the account has to be KYC compliant, Economic Affairs Secretary Shaktikanta Das said the amount of Rs 2.5 lakh can be withdrawn from only one account.

From Friday, the limit of the one-time exchange of the now-scrapped Rs 1,000 and Rs 500 notes is fixed at Rs 2,000. If you hold funds in old currencies, it will have to be deposited in your account. This move is to bar people from exchanging their huge reserves of cash into new currencies and ease the milling crowds outside banks.

The reduction in the daily limit, the government said, will help as banks are still facing inadequate supply of smaller denomination currencies.

To withdraw Rs 2.5 lakh from bank account, you will have to sign a self-declaration saying the money was drawn against only one account – father, mother, groom or bride.

Finance minister Arun Jaitley said, “There is absolutely no shortage of cash and about 22,500 ATMs will be recalibrated from Friday to dispense the new Rs 500 and Rs 2,000 notes.”

Rajnish Kumar, deputy managing director, SBI, said, “The situation was by and large under control and the queues had eased in many cities as Rs 2,000 and also Rs 500 notes were available. Whatever cash we are getting is being distributed in rural areas and the report from the 40 circles said that situation is improving. The queues may get longer with the exchange limit reduced but then we will be able to dispense off the customers also faster so that should take care of the situation.”

Now if the combined deposits into an account exceeds of Rs 2.5 lakh during the currency exchange period, a PAN card becomes mandatory. Earlier, all deposits up to Rs 49,000 was exempt from the use of PAN card. Banks and post offices have to report all deposits of over Rs 2.5 lakh into savings account and those in excess of Rs 12.5 lakh in current accounts during this period. Banks and post offices will have to file statement of financial transactions on or before January 31, 2017, according to the IT notification.

Earlier, banking correspondents (BCs), an informal network of 1,30,000 personnel in rural areas, were allowed multiple withdrawals a day, with an individual transaction limit of Rs 50,000. Businesses with current accounts active for three months were also permitted to withdraw Rs 50,000 every week

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