Weekly cash limit for savings accounts raised to Rs50,000 from 20 Feb, no curbs from 13 March

The Reserve Bank of India (RBI) has announced an enhancement of cash withdrawal limit for savings bank account holders from Rs24,000 to Rs50,000 effective 20 February, while there will be no limit on withdrawal from 13 March.

RBI had imposed these limits in November last year after the government announced a ban on high-value currency notes, and began to replace them with new notes.

RBI has already lifted restrictions on daily withdrawal of money from ATMs and from current accounts effective 1 February.

Meanwhile, RBI today opted for a status quo in its key rates but shifted the stance of the monetary policy from 'accommodative' to 'neutral'.

"The decision of the Monetary Policy Committee (MPC) is consistent with a neutral stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 per cent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 per cent, while supporting growth," it said.

Accordingly, the repo rate at which it lends to the system stands at 6.25 percent and the reverse repo rate at which it absorbs excess liquidity is also retained at 5.75 percent.

The monetary policy committee said it is "committed to bringing headline inflation closer to 4.0 percent on a durable basis and in a calibrated manner" and this requires further "significant decline in inflation expectations, especially since the services component of inflation that is sensitive to wage movements has been sticky.