Checks on ATM and bank withdrawals to continue

new delhi — India will continue to control how much money people can withdraw from ATMs and banks after the end of a deadline to exchange or deposit its devalued high-value currency bills.

According to a statement from the central bank late Friday, the daily limit on ATM withdrawals will go up to 4,500 rupees ($66) from 2,500 ($37) rupees, but the weekly cap on withdrawals from bank accounts will remain at 24,000 rupees Saturday onwards. It wasn’t clear how long the limits would be in place.

In a surprise announcement on November 8, Prime Minister Narendra Modi said India was withdrawing 500- and 100-rupee bills as legal tender in order to crack down on tax evasion and corruption.

The deadline for exchanging or depositing the old currency in bank accounts passed on Friday.

Fifty days after the withdrawal of more than 80 per cent of India’s currency, cash remains in short supply and everything from retail sales to wholesale markets have experienced turmoil in a country where the vast majority of people still earn and spend in

4,500 rupees will be the daily limit on ATM withdrawals

cash. While hundreds of millions of Indians use cash transactions to hide their wealth and avoid taxes, less than 3 per cent of the population pays income taxes. The vast majority of Indians use cash simply out of habit or because of poverty and a lack of easy access to banks.

The devaluation of the old highvalue bills has also caused hardships to millions of middle class Indians who do have bank accounts and debit cards because the government hasn’t been able to print enough 2,000- and 500-rupee bills to meet the demand. Long lines continue to wind outside ATMs and banks often rush out of cash within a few hours of the start of the work day.

Experts say only about 40 percent of the country’s ATMs have so far been reset to fit the changed size of the new notes. —