Currency exchange: Government reduces daily cash limit to Rs 2000, eases norms for farmers

The government has lowered the exchange limit for now-defunct Rs 500 and Rs 1000 currency notes to Rs 2,000 from the existing cap of Rs 4,500, effective Friday.

Among other measures, it has allowed up to Rs 2.5 lakh cash withdrawal from a bank account of a bride or groom or their parents for a marriage during the ongoing wedding season.

"To enable a larger number of people to get the benefit of over-the-counter exchange of Rs 500 and Rs 1,000 notes, the existing limit of Rs 4,500 will be reduced to Rs 2,000 with effect from Friday," Economic Affairs Secretary Shaktikanta Das told media.

The over-the-counter exchange of Rs 500/1,000 in return of new currency will be available "once per person until December 30".

"This will enable a larger number of people to exchange notes. There is no cash shortage and enough cash is available," he said.

Bsides, farmers who have taken crop loan or have Kisan credit card can withdraw Rs 25,000 per week. Also, those who have got payments through RTGS or cheque deposit in KYC compliant bank account can withdraw an additional Rs 25,000 a week. This takes the total cash withdrawal limit for farmers from KYC compliant bank accounts to Rs 50,000 per week.

The decision comes a day after the government directed banks to put indelible ink mark on the right index finger of persons to screen them from using the exchange facility more than once.

Prime Minister Narendra Modi had on November 8 demonetised Rs 500 and Rs 1,000 notes in his biggest war against black money, terror financing and counterfeit notes.

Since then a lot of representations have come to Prime Minister and Finance Minister to ease withdrawal norms for wedding purposes.

"This has been considered by the government and decided that for wedding ceremonies, up to Rs 2.5 lakh will be allowed to be withdrawn from the account if father or mother or the bride and groom," Das said.

He said the account has to be KYC compliant and self-declaration has to be given to the bank.