The Reserve Bank of India is lifting caps on ATM withdrawals, signaling that the nation’s cash crisis may finally be drawing to a close.
RBI imposed strict limits on ATM cash withdrawals after Nov. 8, when Prime Minister Narendra Modi announced the overnight (literally) demonetization of 500 rupee and 1,000 rupee banknotes (worth about $7.50 and $15, respectively). It was done in an effort to root out “black money” — i.e., undeclared or ill-gotten income — hidden away in homes across the country.
The demonetization of notes, representing 86 percent of India’s currency, coupled with logistical issues in the rollout of new 500 rupee and 2,000 rupee notes led to massive ATM outages in a country where virtually all purchases are paid in cash.
While government-imposed ATM cash limits have been removed, individual banks have the right to impose their own limits just as they did before the demonetization, a circular from the reserve bank explained.
Additionally, RBI said, ” … banks are urged to encourage their constituents to sustain the movement towards digitization of payments and switching over of payments from cash mode to noncash mode.”