Page 41 - Banking Finance December 2016

FEATURES

Demonetisation

Boon or Bane - Impact Analysis

O n the evening of 8th November, 2016 Indian 4. The weekly cash withdrawal limit from bank accounts
has been increased to Rs 4,500. The cash limit of ATMs
Prime Minister Narendra Modi had declared
enhanced to Rs 2500 from Rs 2000.
that currency note of Rs 1000 and Rs 500 will
no longer hold any legal tender from immedi-
ate effect. New notes bearing value of Rs 500 and Rs 2,000 of Rs 20,000 has been enhanced to Rs 24,000. The cash
withdrawal limit of Rs 10,000 per day has been re-
will be available in the market including the existing older
moved.
notes and coins of denomination Rs 1, Rs 2, Rs 5, Rs 10, Rs
5. The government has also raised the cash withdrawal
20, Rs 50, Rs 100.
limit of at least three-month old current accounts to
Rs 50,000 per week.
This step is seen as an effort to stop the counterfeiting of
the current banknotes alleged to be used for funding ter- 6. Economic affairs secretary Shaktikanta Das said
rorism and for cracking down on black money in the coun- recalibration of ATMs has already started and they will
try. The move is also aimed at reducing corruption, drug start dispensing the new Rs 2,000 currency notes from
menace and smuggling. This effect has raised a mixed feel- 15th November.
ing all throughout the nation where 80% of the populace is 7. Time limit for submitting annual life certificate for pen-
favouring the motion and welcomes the decision. Whereas, sioners have been extended to 15 January 2017.
some political bigwigs are considering this move as a down-
8. A large number of micro-ATMs will be deployed to help
fall for the country quoting that it is creating inconvenience
people withdraw cash through debit cards, Shaktikanta
in the daily life of the commoner rather than hitting the
Das said.
black money holders.
9. The supply of cash to branch post offices has been en-
hanced to facilitate cash withdrawals from postal ac-
Moves after Demonetisation counts.

The important moves by the government to mitigate the
10. Reserve Bank of India (RBI) has set up a task force un-
cash crunch as a huge volume of currency notes are taken
der deputy governor S.S. Mundra to oversee the
out of circulation are:
recalibration of ATM machines after the country intro-
1. Banks have waived ATM charges on all transactions af-
duced new banknotes to replace old Rs 500 and Rs
ter a request by the government.
1,000 notes.
2. The government has extended the usage of existing Rs 11. Citizens will have until 30 December 2016 to tender
500 and Rs 1,000 notes for select transactions till 24 their old banknotes at any office of the RBI or any bank
November from the earlier deadline of 14 November. branch and credit the value into their respective bank
3. The limit of Rs 4,000 for over the counter exchange accounts.

BANKING FINANCE | DECEMBER | 2016 | 41

Copyright@ The Insurance Times. 09883398055 / 09883380339