RBI working on ways to reduce cost of online deals

NEW DELHI: The RBI was working on a plan to reduce online transaction costs to encourage digital banking even as the cash situation was returning to normal, sources quoted governor Urjit Patel as saying on Friday.

The RBI restricted cash withdrawals as there was a “humongous demand” for cash after the government announced recall of ` 500 and ` 1,000 banknotes on November 8, Patel told a parliamentary panel.

NEW DELHI: The RBI was working on a plan to reduce online transaction costs to encourage digital banking even as the cash situation was returning to normal, sources quoted governor Urjit Patel as saying on Friday.

The Reserve Bank of India restricted cash withdrawals as there was a “humongous demand” for cash after the government announced recall of ` 500 and ` 1,000 banknotes on November 8, Patel told a parliamentary panel.

“…these restrictions are temporary and being reviewed constantly,” the RBI said in a written submission. Patel, deputy governor R Gandhi and six members of the central bank’s board appeared before the public accounts committee for a “review of the monetary policy”. “Their submission was limited to monetary policy, with some references being made to the issue of demonetisation,” a panel member told HT. After a long debate, the panel agreed that questions on demonetisation could be asked but only in context of the monetary policy, sources said.

The bank was well within its rights to restrict withdrawals, the limits for which were decided taking into account availability of banknotes and past patterns of withdrawal, Patel said. Cash flow in the country was “almost normal” in urban areas and efforts were on to improve the situation in rural and remote parts of the country, sources quoted the country’s top banker as saying.