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Monday, November 28, 2022

Government Announces Measures to Ease Demonetization Cash Crunch After 2 AM Meeting

Government has announced a slew of measures to ease the hardships being faced by ordinary citizens due to demonetization, after a meeting led by PM Modi to review the #Demonetization process late last night.

Here are the key measures announced by Economic affairs secretary Shaktikanta Das after the meeting (Hindupost comments in italics) –

1.) To improve the reach and distribution of cash, especially in rural areas :

  • The banks have been advised to increase the cash holding limit of the banking correspondents to at least 50,000 rupees. In other cases banks would be encouraged to increase the cash holding limits beyond 50,000 rupees in appropriate cases. Banking correspondents will be permitted by banks to draw cash in a single day multiple times.  (Banking correspondents are bank representatives who help villagers in banking transactions – deposit money, take money out of savings account, loans etc.)
  • Micro ATMs will be deployed in large number of areas to dispense cash against debit and credit cards.
  • All Banks have now been advised to arrange mobile banking vans to the extent possible at major hospitals to carry out emergency banking transaction for patients

2.) Increased limit of withdrawals –

  • Current account business entities which have operational current account during last 3 months will be permitted to draw Rs. 50K at a time (this should aid small businessmen who were facing severe liquidity crunch due to earlier Rs. 10K limit)
  • The ATM limit also have been increased to 2,500 rupees in respect to the recalibrated ATMs – in other words ATMs which are recalibrated to dispense new Rs500 or Rs 2000 notes, they can dispense 2,500 at a time (earlier the limit was Rs. 2000 at a time)
  • Banks have been advised to increase the exchange limit over the counter from the existing Rs.4000/- to Rs.4500/-
  • The weekly limit of Rs.20,000/- for withdrawal from Bank accounts has been increased to Rs.24,000/-. The limit of Rs.10,000/- per day has been removed.

3.)  To separate and ease cash exchange & withdrawals, there will be separate queues for those who are visiting the banks only to exchange old series of notes for new notes

4.) Measures to aid senior citizens, pensioners

  • There will be separate queues for senior citizens and divyang persons in banks (some banks have already been doing this, but it is good to implement this everywhere)
  • Time limit for Annual life certificate, which pensioners are required to submit during November, for that extended till 15 Jan’17 (this is a much needed measure, as it will save pensioners the hassle of visiting banks to submit this certificate during the ongoing rush)

5.) Extension to exempt transactions where old series of 500 & 1000 notes can be accepted:

  • The limit for such exempt transactions is being extended from 14th November midnight to 24th November midnight
  • These exempt transactions are –
    • Payments at Government Hospitals and pharmacies in these hospitals
    • Railway ticketing counters
    • Ticket counters of Government/Public Sector Undertaking buses
    • Airline ticketing counters at airports (but no cancellation refund on such air tickets booked)
    • For purchases at consumer co-operative societies (ID proof required), at milk booths, at crematoria/burial grounds, at petrol/diesel/gas stations of Public Sector Oil Marketing Companies
    • For arriving and departing passengers at international airports and for foreign tourists to exchange foreign currency at airports up to a specified amount.
    • Payment for court fees.
    • Payments towards public utility bills, Government taxes, penalties etc.
    • Payments in toll-plazas of the State and National Highways.

Note: The Ministry of Road Transport and Highways has freed national highways of any toll charges till 14 November. There has been no announcement yet on extending this till 24th November.

6.) Expedite recalibration of ATMs – earlier the FM had announced that it would take 2-3 weeks to recalibrate the nearly 2 lakh ATMs across the country to dispense new 500, 2000 notes.

  • To expedite the process asap, a task force has been setup under chairmanship of RBI Dy Guv, which will have reps of banks as its members. It also has representatives of department of financial services and the ministry of home affairs as their representatives.
  • This task force has been instructed to work out a strategy to expedite whole process of recalibration of the ATMs

7.) Promote online transactions & e-payments

  • It has been decided that all govt departments and central public sector undertakings will maximize their E-transactions.
  • RBI advised National Payments Corp. of India to waive its transaction charges on old transactions which are settled through financial switch. This facility will be available till 31st Dec.
  • Banks also being advised to waive their charges for various kinds of transactions.

It has been reported that certain business houses viz. Hospitals , Caterers , Tent houses etc. are not accepting Cheques/Demand Drafts and online payment transfer from customers. It is advised that in such cases customer can make a complaint to the concerned District Magistrates/District Administration for action against such establishments.

While citizens understand the long-term benefits of demonetization, the move has created severe inconvenience across the nation. These measures announced last night are welcome, but all arms of the Government must continue to work round the clock in crisis management mode to ensure that the situation is normalized as soon as possible. Government must continue to explore other avenues, including use of Police/Army to transfer cash, engaging election time staff for currency exchange etc.


Tweet series : https://twitter.com/ANI_news/status/797906868525879296



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