Published On : Wed, Feb 8th, 2017

RBI hikes weekly cash withdrawal limit to Rs 50,000 from Feb 20; no cap from Mar 13

In what could bring respite to the common man, Reserve Bank of India (RBI) on Wednesday said that there will be no limit on cash withdrawals from March 13 while the weekly withdrawal limit has been enhanced from the current Rs 24,000 to Rs 50,000.

Announcing the bi-monetary policy the RBI kept the interest rates unchanged. The 6-member Monetary Policy Committee, headed by RBI Governor Urjit Patel, kept the repo rate or the short term rate at which central bank lends to banks unchanged at 6.25 percent and reverse repo rate at 5.75 percent.

This is RBI’s second monetary policy review after demonetisation of old Rs 500 and Rs 1,000 currency notes.

Here are the updates:
– Effective February 28, limit on cash withdrawal will be enhanced to Rs 50,000
– Accessing economic conditions in short term tough due to demonetisation
– MPC is committed to achieve the targeted CPI of 4 percent

Key Highlights of Monetary Policy
-Current account deficit is likely to remain muted and below 1 per cent of GDP in 2016-
-Decline in headline CPI inflation in November and December has been larger than expected
– Headline CPI inflation in Q4 of 2016-17 is likely to be below 5 percent
– Inflation is projected in the range of 4.0 to 4.5 percent in first half of the financial year
– In the second half it will be in range of 4.5 to 5.0 per cent
– The Committee remains committed to bringing headline inflation closer to 4.0 percent
– Excluding food and fuel, inflation has been unyielding at 4.9 percent since September
– Global growth is projected to pick up modestly in 2017
– RBI changes policy stance from “accommodative” to “neutral”
– All six members of MPC voted in favour of the decision
– Next monetary policy on April 5, 6
– See CPI at 4 percent within a band of +/- 2 percent in the medium term
– Marginal Standing Facility (MSF) rate and the Bank Rate stands at 6.75 percent
– RBI keeps CRR unchanged at 4 percent
– Sensex down over 100 points
– Expects rebound to 7.4 percent next year
– GDP Growth target lowered to 6.9 percent from earlier target of 7.1 percent
– Expect growth to recover sharply in FY 18