On November 8, the government had withdrawn legal tender on currency notes of R500 and R1,000 denominations, amounting to roughly 86% of the R15.44 lakh crore then in circulation.
The weekly limit on cash withdrawals from savings accounts will be eased progressively, being raised to R50,000 a week on February 20 from R24,000 at present, and then removed completely on March 13, Reserve Bank of India (RBI) deputy governor R Gandhi said on Wednesday.
He said as on January 27, the value of the total currency in circulation was R9.92 lakh crore.
On November 8, the government had withdrawn legal tender on currency notes of R500 and R1,000 denominations, amounting to roughly 86% of the R15.44 lakh crore then in circulation. The government and the RBI had imposed limits on withdrawal of money from ATMs and bank branches in view of the currency shortage following demonetisation.
As remonetisation picked up pace, the central bank has progressively eased limits on cash withdrawals. On January 31, it had removed all limits on cash withdrawals from current accounts, cash credit accounts, overdraft accounts and ATMs.
Before that, on January 16, the limit on cash withdrawals from current accounts, cash credit accounts and overdraft accounts was raised to R1 lakh per week from R50,000 earlier.
The limit on withdrawals from ATMs was also enhanced to R10,000 per day per card from R4,500 earlier.
Easing of cash withdrawal limits has resulted in a decline in digital transactions. Transactions made through point-of-sale (PoS) terminals have begun to show a marginal decline after peaking at R52,223.84 crore in December.
The aggregate value of such transactions in January stood at R48,124.11 crore, according to the central bank data.
In the first five days of February, PoS transactions added up to R7,100 crore, lower than R8,310 crore for the corresponding period in January. Transactions made through the Unified Payments Interface (UPI) channel, however, are growing, clocking R360 crore in the first five days of February, as against R210 crore during the corresponding period in January.
The Unstructured Supplementary Service Data (USSD) channel saw transaction value double to R7.16 crore in the first five days of February over the comparable period in January.