ATM cash withdrawal limit may be raised as supply of new Rs 500 notes to go up

Two weeks have passed since the announcement of demonetisation but there are still long queues outside banks and ATMs. However, bankers expect the struggle to get cash will end soon as the supply of new Rs 500 notes is to go up.

"Next week should be much better. ATMs are replenished regularly and are not running out of cash which should give comfort to customers. The supply of notes (from the central bank) is in plenty but the point is that people should start spending," Arundhati Bhattacharya, chairman of State Bank of India, told ET.

"Next week, we should also see good supply of Rs 500 notes which will ease the situation,” she said.

Apart from easing cash crunch situation, banks are also expected to inform public about online channels to do bank transactions.
As per few bankers, ATM cash withdrawal limit could be raised from Rs 2,500 as ATMs are being recalibrated to dispense the new Rs 500 and Rs 2,000 notes.

Also, the limit to exchange old banknotes with new one will be reviewed on November 24.

Presently, an individual can withdraw Rs 24,000 per week, Rs 50,000 from current account for payments of salaries and other dues and Rs 2.5 lakh to spend on weddings.

"The government may review the Rs 24,000 cap as currency supply will improve next week. But at the same time, the government may scrap the facility to exchange notes while directing banks to encourage people wanting to exchange notes to open banks accounts,” a bank chief told ET.

PM Narendra Modi said demonetisation led to collection of Rs 5 lakh crore.

(Image: Reuters)