Published On : Wed, Dec 28th, 2016

Let cash curbs stay till new notes come in, banks tell govt

A man sits in a queue to deposit or exchange his old high denomination banknotes outside a bank in Ahmedabad
New Delhi
: Banks have asked the government to extend the curbs on cash withdrawals beyond December 30 until an adequate quantity of new currency is injected, according to bankers and officials in the Finance Ministry. Lifting the curbs immediately after this week could disrupt branch operations as a large number of people could turn up to withdraw cash, bankers have told the finance ministry.

The government had informally sought feedback from top bankers on currency withdrawal and plans to lift cash curbs after December 30, said sources.

At present, individuals can withdraw Rs 2,500 a day from ATMs and Rs 24,000 a week from their bank accounts. The government is expected to announce its decision on withdrawal curbs Friday.

These restrictions should go only when there is a sufficient amount of bank notes in the system. Until and unless that happens, they (the government) cannot take away the restrictions. The moment they do this, everybody will want to go and draw out a lot. That will become a problem, said a senior executive of the State Bank of India.