The government is considering easing restrictions on cash withdrawals, starting with cooperative banks, once 80 per cent of the new currency is introduced into the system, a top official said on Thursday.
With 50 per cent or Rs. 7.5 lakh crore worth of remonetisation complete, queues at banks have reduced substantially and are visibly longer only in poll bound States like Uttar Pradesh and Punjab, he said.
“Withdrawal restrictions will first be relaxed for cooperative banks and then for all banks. And over time, as remonetisation is completed, they will be removed totally,” he said.
“We could not print all the currencies in one go because we wanted the money to be channelised in the system first,” he said. “When 80 per cent of new currency is pumped in into the system, withdrawal restrictions will be eased.”
Before the announcement of demonetisation, the government had arranged for the printing of 200 crore Rs 2,000 notes, or roughly about Rs 4 lakh crore in value. They were the first set of notes to be circulated.
Thereafter, new Rs 500 note was introduced and now all the four printing presses of RBI at Dewas in Madhya Pradesh, Nashik in Maharashtra, Salboni in West Bengal and Mysuru in Karnataka were working overtime to replenish the exhausted currencies.
The official said the restrictions would be withdrawn once the situation stabilised.
“Remonetisation has substantially happened and as and when it [stabilisation] happens, restrictions will be eased,” he said, adding that there would be no cap on deposits made in the bank from January 2017.
