RBI Monetary Policy: From March 13, no ATM withdrawal limits for savings accounts

Moneycontrol BureauThe Reserve Bank of India will lift all ATM withdrawal limits on savings bank accounts from March 13, the central bank's Deputy Governor R Gandhi told a press conference on Wednesday after a Monetary Policy Committee meet. "The limits on cash withdrawal from savings bank accounts continue to be in place,"said RBI Deputy Governor R Gandhi. "'In line with the pace of remonetisation, it has now been decided to remove these limits in two stages." The current ATM withdrawal limit for saving accounts - in effect since last week - is Rs 24,000 per week. This will be raised to Rs 50,000 per week from February 20, Gandhi said. The RBI had removed the limits on withdrawals from current accounts on February 1.Restrictions on withdrawal limts have been in place since November 8, when Prime Minister Narendra Modi announced that 86% of the currency in circulation would be done away with in a bid to crack down on black money.With banks caught off guard and mints struggling to keep up with demand for new Rs 500 and Rs 2000 notes, ATMs ran dry across the country and long queues were witnessed. Curbs were imposed on cash withdrawals starting with a limit of Rs 2,000 a day in the first week since the note ban was announced.The cash crunch caused consumption and spending to reduce significantly in the first two months since demonetisation was announced. Retail inflation in December fell to a three year low of 3.41 percent.But as the effects of the note ban wear off, RBI has been hard at work to increase money supply by stepping up its cash printing operations in the hope of slowly increasing withdrawal limits and increasing consumption in the country. The situation has somewhat normalised in recent weeks, with most banks saying that nearly all their ATMs would dispense cash by March. Meanwhile, the RBI continued to remain hawkish as it kept key rates unchanged despite falling inflation in the country, contrary to popular opinion that the rates will be cut by atleast 25 basis points.This was the second Monetary Policy Committee meet after demonetisation hit the country. In both the meets, the RBI continued to keep rates unchanged. It said that despite an apparent food inflation in the country, it cited the global inflationary pressures that could affect prices in India. Global inflation could be triggered by a possible rise in crude and metal prices, and the strengthening of the dollar could be another factor, according to the RBI.