New Delhi: Prime Minister Narendra Modi reviewed the position of supply and availability of currency notes yesterday late evening and took certain decisions to further activate the dispensing of cash through the networks of banking correspondents (BCs), post offices, ATMs, banks and e-payment systems. The existing exemptions for acceptance of old Rs 500 and Rs 1,000 notes for certain types of transactions are being extended beyond 14 November midnight up to 24 November midnight.
There is enough cash in the system to meet the requirement, the government says. People are, therefore, advised not to panic.
The prime minister reviewed the supply and availability of currency notes yesterday late evening yesterday. The meeting went on till past midnight. It was attended among others by the Union Minister of Home Rajnath Singh, Union Minister for Finance and Corporate Affairs Arun Jaitley, Urban Development and I&B Minister M Venkiah Naidu, MoS (Independent Charge) for Coal & Power Piyush Goyal and MoS (Finance) Santosh Kumar Gangwar. It was also attended by the Governor and Deputy Governor of Reserve Bank of India, all secretaries of the Ministry of Finance and senior officials from the PMO.
The meeting took stock of the current status of supply of cash and took certain decisions to further activate the dispensing of cash. The following decisions were taken keeping in view the convenience of the people.
Banks will increase the cash holding limit of BCs to at least Rs 50,000 each. Banks will also allow higher limits in appropriate cases. Banks will replenish the cash with BCs multiple times in a day as per requirement of the BCs. BCs have a wide presence in rural areas. Totally there are 1.2 lakh BCs in the country. The above decisions will facilitate wider reach in the rural areas for exchange and withdrawal of cash from bank accounts.
It may be noted that, with 1.2 lakh BCs and 1.3 lakh branch post offices getting further activated, a total number of 2.5 lakh points in rural areas will be available to disburse cash and facilitate cash withdrawals from bank accounts.
To expedite the process of recalibration of ATMs, a task force is being set up under Deputy Governor, RBI, consisting of representatives of banks and the Finance Ministry. This task force will draw up action plan and ensure implementation of this action plan for quick recalibration of the ATMs to enable them to dispense new bank notes of Rs 500 and Rs 2,000.
In the meantime, micro ATMs will be deployed to dispense cash against debit/credit cards up to the cash limits applicable for ATMs. The handheld micro ATMs have the facility of mobility and deployment at the required places.
The withdrawal limit of Rs 20,000 per week has been enhanced to Rs 24,000. The withdrawal limit of Rs 10,000 per day has been removed.
The limit of Rs 4,000 for over the counter exchange against old Rs 500 and Rs 1,000 notes has been increased to Rs 4,500. This will enable the Banks to give lower denomination notes for Rs 500 while dispensing the remaining Rs 4000 through Rs 2,000 notes.
The ATMs are progressively getting recalibrated. As and when they are recalibrated, the cash limit of such ATMs will stand enhanced to Rs 2500 per withdrawal. This will enable dispensing of lower denomination currency notes for about Rs 500 per withdrawal. Other ATMs which are yet to be recalibrated, will continue to dispense Rs 2,000 till they are recalibrated.
Business entities having current accounts that are operational for the last three months or more will be allowed to draw Rs 50,000 per week. This can be done in a single transaction or multiple transactions. This will enable the small business entities to pay wages to their workers and make sundry payments.
Adequate cash will be made available with district central cooperative banks (DCCBs) to facilitate withdrawal from existing accounts. The cash withdrawal limits for Banks will apply in case of DCCBs also.
The measures above are expected to enhance the reach of the banking system substantially to exchange notes and facilitate cash withdrawal from bank accounts.
All central government departments and public sector enterprises are being instructed to use the method of e-payments to the maximum extent possible.
RBI has advised the National Payments Corporation of India (NPCI) to waive its transaction charges on transactions settled through National Financial Switch (NFS) till 31 December 2016.
Banks are also being advised to waive similar charges currently levied by them. They have been advised to arrange separate queues in their branches for senior citizens and handicapped persons; customers for transactions against accounts held with the Bank; and exchange of notes. There will, therefore be, three or more separate queues in every branch.
A pensioner is required to submit his or her annual life certificate during the month of November. This time limit has been extended up to 15 January 2017.