Reserve Bank of India(RBI) eases withdrawal limits for deposits made in legal tender Monday Nov 28,2016

To encourage people to deposit valid currency notes in banks, RBI on Monday Nov 28,2016 said bank customers would be able to withdraw deposits made in current legal tender notes beyond the current limits, a move aimed at increasing currency circulation in system.

For example, if someone deposits valid legal tenders (Rs 2,000, Rs. 500, Rs. 100, Rs. 50, Rs. 20, Rs. 10, Rs. 5) of Rs. 4,000, the withdrawal limit for that person would rise by Rs. 4,000 over and above weekly withdrawal limit of Rs. 24,000.

For current accounts, the withdrawal limit is Rs. 50,000 a week for small traders.

In a late evening circular, the Reserve Bank said that it has been reported that “certain depositors are hesitating” to deposit their monies into bank accounts in view of the current limits on cash withdrawals from accounts.

“As it is impeding active circulation of currency notes, it has been decided, on careful consideration, to allow withdrawals of deposits made in current legal tender notes on or after November 29, 2016 beyond the current limits; 

“Preferably, available higher denominations bank notes of Rs. 2000 and Rs. 500 are to be issued for such withdrawals,” the Reserve Bank said.