Extension of Deadline for Post demonetization: Banks

New Delhi, December 28: As we know that,Prime Minister Narendra Modi announced the demonetization of old Rs.500 and Rs.1000 notes since November 8.

Modi government also set limits of cash withdrawal from banks and ATMs which will remain till December 30.The deadline of limitations about cash withdrawals will reached with in two days.

Banks have asked the government to extend the curbs on cash withdrawals beyond December 30 until adequate amount of currency is printed and provided to banks.

Banks have told the Finance Ministry that restrictions on cash withdrawal should continue after December 30. People in large numbers will flock to banks if the government lifts the limits on cash withdrawal, said banks.

At present, individuals can withdraw Rs 2,500 a day from ATMs and Rs 24,000 a week from their bank accounts. Since there is a shortage of cash in banks and ATMs are dry, bank officials wants restrictions on cash withdrawal to continue.

"These restrictions should go only when there is a sufficient amount of bank notes in the system. Until and unless that happens, they (the government) cannot take away the restrictions. The moment they do this, everybody will want to go and draw out a lot. That will become a problem", a senior executive of the State Bank of India told the media.

However the Indian Bank's Association (IBA), the umbrella organisation representing private and state-owned banks, said it has not proposed any recommendation till now.The cash crunch has compelled banks not to expend the Rs 24,000 per account in a week, the cash withdrawal limit set by the government.

From November 10 to December 19, banks provided only Rs 5.92 lakh crore to the public either over the counter or through ATMs, as per RBI data. This is just 38.3 per cent of the old notes worth Rs 15.44 lakh crore withdrawn by the government.

Though government has taken several initiative to push digital transactions during the demonetization period, some relaxations on withdrawals may be announced on December 30. The shortage of Rs 500 notes and acquiring of legal tenders are the two biggest problems banks have been facing.

The government and the RBI have so far not specified categorically that they will do away with the restrictions on withdrawals after December 30.