Hike cash withdrawal limits to mitigate hardship : Assocham

5 Dariya News

New Delhi 30-Dec-2016

Apex industry body Assocham on Friday urged the government to increase cash withdrawal limits from saving and current accounts and through ATMs to mitigate the hardship faced by the people and businesses since demonetisation."The government should make policy changes to mitigate the impact of high denomination currency notes by increasing daily cash limit through ATMs to Rs.5,000 from Rs 2,500," said the Association Chambers of Commerce of India (Assocham) in a statement here.As the 50-day period for returning the old notes to banks with restrictions on cash withdrawals through ATMs and from saving/current account ended on Friday, the apex body asked the government to allow current account holders to draw an amount equivalent to one per cent of preceding year's sale per month.Following the withdrawal of 86 per cent of the currency from circulation, the government had limited cash withdrawal to Rs 24,000 a week for saving account holders and Rs 50,000 a week for current account holders due to acute shortage of new and lower denominated notes with the banks across the country.

"The RBI (Reserve Bank of India) should direct banks to raise the overdraft (OD) limit of current accounts to help businesses tide over the currency shortage. Links in the supply chain can use the credit available from enhanced OD limit to meet their payment obligation through the banking system," said Assocham.Noting currency shortage has also disrupted the supply chain of wholesalers, stockists and retailers of companies, it said that normal services to corporates were affected due to pressure on banks and called for restoring them to enable businesses to carry out their day-to-day banking operations."The Rs 5,000 limit for exchange of currency by foreigners needs to be raised to meet their cash requirements, including medical treatment and other exigencies," it said.The apex body also sought mobile ATMs services in rural areas and in habitats or clusters with high density of low-income households.