India's economic affairs secretary Shaktikanta Das said today (February 3) that the process of remonetisation was "nearly complete" since there were practically no restrictions on withdrawals and the only remaining restriction was the weekly limit of Rs 24,000 on savings bank accounts.
The economic affairs secretary said the remonetisation process reached near-completion less than 90 days after Prime Minister Narendra Modi announced the demonetisation of old Rs 500 and 1,000 notes on November 8.
"All restrictions have been removed except on savings bank account of Rs 24,000 per week. This (removal of withdrawal limit) is also a matter of time," he told PTI in an interview.
"Only a few withdraw Rs 1 lakh a month. Therefore, effectively and practically today, there is no restriction. I think the process of remonetisation is near-complete. I am using the word near-complete because this Rs 24,000 limit is there," he said.
"In less than 90 days, the whole process of remonetisation is almost complete. This speaks volumes about the way the remonetisation has been completed."
He further said currency supply and management were the responsibility of the Reserve Bank of India and the central bank will take a call in the near future on lifting the only remaining restriction, which is weekly withdrawal of Rs 24,000 from a savings bank account.
The emphasis will be on providing lower denomination notes, Shaktikanta Das said.
Earlier in the week, the central bank had announced lifting of restrictions on daily withdrawal of cash from current and overdraft accounts as well as ATMs.
It had also promised to review the weekly limit in the near future depending on the pace of remonetisation.
The government and RBI had imposed limits on withdrawal of money from ATMs and banks after the cash crunch which followed the scrapping of old Rs 500 and Rs 1000 notes.
It had put the withdrawal limit Rs 2,000 per day from ATMs and Rs 10,000 per week from banks. Customers holding current or overdraft or cash credit accounts were allowed to withdraw up to Rs 50,000 in a week.
These limits, however, were gradually eased, with RBI pumping in new notes of Rs 500 and Rs 2,000.
Towards November end, RBI increased the cap on savings bank withdrawals to Rs 24,000 a week.
Early in January, withdrawals from ATMs were further relaxed to Rs 4,500 per day from ATMs, but the weekly withdrawal limits were retained. On January 16, RBI enhanced the ATM withdrawals further to Rs 10,000 a day, while keeping the weekly limits at Rs 24,000.
Withdrawal limits from current accounts, overdraft and cash credit accounts were enhanced to Rs 1,00,000 per week