Centre further opens the cash tap

All new bank accounts, except those opened under the Jan Dhan Yojana, and time deposits in banks, post offices and co-operative banks will now require PAN, even as the Union government eased the demonetisation norms on Thursday to facilitate cash flows for farmers and families of those getting married. The exchange limit for old notes has been reduced to Rs. 2,000 from the enhanced Rs. 4,500 limit set three days ago.

Up to Rs. 2.5 lakh each can be withdrawn by the prospective bride and groom’s family for their wedding expenses and farmers can withdraw up to Rs. 25,000 a week.

As part of continuing corrective action on the demonetisation policy, the Finance Ministry on Thursday also allowed traders registered with agricultural produce markets to withdraw up to Rs. 50,000 a week from banks, while farmers were granted a 15-day extension on their crop insurance premium payments.

Some relief was also granted to Central government support staff in clerical and administrative roles, as well as their peers in defence and paramilitary forces, railways and public sector firms.

Easing restrictions to facilitate cash flows on Thursday, the Centre gave an option to its staff to draw an advance of Rs. 10,000 in cash against their next month’s salary.

This benefit will be restricted to Group C and Group D employees and officers can’t avail it.

“Up to Rs. 2.5 lakh cash can be drawn from bank account for a marriage during the ongoing wedding season,” Economic Affairs Secretary Shaktikanta Das told reporters.

One-time withdrawal

“A member of the family, be it father or mother, can make the one-time withdrawal up to that limit,” he said.

The Rs. 2.5 lakh limit will apply separately to the girl’s as well as the boy’s family, after filing a declaration and PAN card details and any misuse of this facility will invite action, a Finance Ministry statement here said.

“To enable larger number of people to get the benefit of over-the-counter exchange of Rs. 500 and Rs. 1,000 notes, the existing limit of Rs. 4,500 will be reduced to Rs. 2,000 with effect from Friday,” Mr. Das said.

Earlier, the government asked banks to use indelible ink on the index fingers of customers’ right hands to prevent abuse of the facility.

Further, closing the possibility of opening a bank account without a PAN card, as per new rules issued by the Income Tax Department, the government appeared to be looking to curb the possibility of people opening multiple new accounts to deposit large volumes of cash. Currently, there are about 25 crore PAN card holders.

“This could create a different kind of challenge and could deter the financial inclusion programme of the government, since not everybody in the country has a PAN card. There will be many citizens who do not fall under the PM’s Jan Dhan Yojana category, but want a bank account,” said Vipul Jhaveri, partner (tax) at Deloitte, Haskins & Sells.

The withdrawal facility for debit card holders at select petrol pumps with SBI POS devices is expected to ease the pressure on ATMs and bank branches.

This facility will be available at 2,500 petrol pumps across the country, which is expected to be expanded to 20,000 in a phased manner. It will also extend beyond November 24.

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Printable version | Apr 14, 2021 5:46:07 PM |

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