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Timeline: Key steps to ease cash crunch post demonetisation

Reuters | Last Updated: Tuesday, November 29, 2016 - 11:54
Timeline: Key steps to ease cash crunch post demonetisation

Mumbai: Prime Minister Narendra Modi shocked the country on November 8 by abolishing Rs 500 and Rs 1,000 notes, which accounted for 86 percent of the cash in circulation. The move was aimed at cracking down on the shadow economy, but has brought India`s cash economy to a virtual standstill.

The government and the Reserve Bank of India have since taken a slew of measures to ease the pain.
 

They are detailed below in chronological order.

NOVEMBER 28

- Govt announces tax amnesty scheme for unreported cash; will charge 50 percent in taxes, surcharges
- People would also have to park quarter of total sum in non-interest bearing deposit for 4 years
- RBI to allow withdrawals above Rs 24,000 weekly limit of deposits made in legal tender
- Those withdrawals would be in new Rs 2,000, Rs 500 bills

NOVEMBER 26

- RBI says banks need to temporarily transfer deposits between Sept 16 and Nov 11 under CRR

NOVEMBER 25

- RBI expands basket of securities that can be accepted for collateral under money market ops
- RBI says old currency notes can be exchanged at RBI branches
- RBI says tourists can exchange foreign currency worth up to Rs 5,000 per week till Dec 15

NOVEMBER 24

- Govt stops over the counter exchange of old bank notes; can only be deposited
- Govt to ensure adequate cash supply for pensioners, armed forces personnel
- Allows certain payments in old Rs 500 notes including at tolls, hospitals for limited time

NOVEMBER 23

- Govt says will offer Rs 210 billion in farm credit to farmers

NOVEMBER 22

- RBI sets balance kept in prepaid wallets, cards (PPIs) at Rs 20,000 from Rs 10,000 til December 30
- Merchants can transfer up to Rs 50,000 from PPIs to banks til Dec 30
- Monthly limits on transactions via PPIs raised to Rs 20,000 for 10,000 til Dec 30
- RBI asks state-run Nabard to disburse up to Rs 230 billion for crop loans

NOVEMBER 21

- RBI allows cash withdrawal of up to Rs 250,000 for wedding-related expenses
- RBI allows farmers to withdraw up to Rs 25,000  a week from their loan, deposit accounts
- RBI gives small borrowers 60 more days before loans of up to Rs 10 million are marked substandard
- Govt allows farmers to purchase seeds from state-run outlets with old Rs 500 notes

NOVEMBER 18

- RBI sets limit of cash withdrawal at card swiping machines at Rs 2,000 per day

NOVEMBER 17

- Govt allows farmers to withdraw up to Rs 25,000 a week against the crop loans
- Govt extends time limit for farmer to pay crop insurance premiums by 14 days
- Cuts limit for over-the-counter exchange of old bills at banks to Rs 2,000 from Rs 4,500

NOVEMBER 15

- Govt says banks must use indelible ink to ensure people change cash only once

NOVEMBER 14

- Extends deadline for payments in old notes including for petrol for limited time

NOVEMBER 13

- RBI raises cap on weekly cash withdrawals from banks to Rs 24,000 from Rs 20,000
- Removes per-day withdrawal limit cap of Rs 10,000
- Raises limit for over-the-counter exchange of old bills at banks to Rs 4,500 from Rs 4,000
- Waives ATM fees for all transactions by savings bank customers til Dec 30
- Govt increases withdrawal limits at recalibrated ATMs to Rs 2,500/day from Rs 2,000

NOVEMBER 11

- Extends deadline for payments in old notes including for petrol for limited time

NOVEMBER 8

- India abolishes Rs 500,  Rs 1,000 notes in fight against `black money`
- Rs 500,  Rs 1,000 notes must be tendered into banks, RBI by Dec  30
- Caps exchange of old bills over-the-counter at banks at Rs 4,000
- Caps cash withdrawals from bank accounts at Rs 10,000 per day till Nov 24
- Caps cash withdrawals from bank accounts at Rs 20,000 per week till Nov 24
- Caps cash withdrawals from ATMs at Rs 2,000 per day per card till Nov 18
- Caps cash withdrawals from ATMs at Rs 4,000 per day per card from Nov 19
- Allows certain payments in old notes including for petrol for limited time
 

First Published: Tuesday, November 29, 2016 - 11:52
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