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Tackling Demonetization: 9 New Steps to Help Citizens Fight the Cash Crunch

As the immediate impact of demonetization, the country saw numerous long ques outside banks, ATMs running out of cash, farmers being unable to purchase seeds, and people facing troubles with small daily transactions. Over two weeks after the November 8 announcement, many citizens are still struggling against the endless cash crunch. But the government has announced some new measures to make things easier for them.

Here’s a look:

1. Increased withdrawal limit for households organising weddings:

wedding

Picture for representation only. Source: Flickr

Demonetization coinciding with the wedding season dampened celebrations in many families. Keeping this in mind, the Reserve Bank of India announced that those who need cash for wedding-related purposes can withdraw up to Rs. 2,50,000 from deposit accounts. The facility is applicable for weddings taking place on or before December 30, 2016. Only those people who have accounts meeting the Know Your Customer (KYC) norms will be able to withdraw this amount and the withdrawal application will need the names of the bride and groom, their identity proofs, addresses, and date of marriage. The move will help people pay vendors like florists and mehandi artists, who accept only cash.

2. Withdrawal charges at ATMs wavered:

The government has wavered withdrawal charges at all the ATMs for people with savings bank accounts till December 30, irrespective of the bank they operate with.

3. 60 more days have been added for repayment of loans payable between November 1 and December 31:

demonetization1

Picture for representation only. Source: Flickr

RBI has extended the loan repayment period by 60 days for housing, car, farm, and other loans worth up to Rs. 1 crore. Borrowers with running working capital accounts can benefit from this facility. It is also available for loans given to Non-Banking Financial Companies, Micro Finance Institutions, Housing Finance Companies, and Primary Agricultural Credit Societies.

4. Increase in withdrawal limit for farmers and traders:

With the onset of the Rabi season, the Economic Affairs Secretary Shaktikanta Das announced that farmers can withdraw up to Rs 25,000 per week from the payment they receive for agriculture produce and their loan, including from Kisan Credit Limit and deposit accounts. Registered traders at mandis will also be allowed to withdraw up to Rs. 50,000 per week.

5. Farmers can purchase seeds with old Rs. 500 notes:

demonetization-3

Picture for representation only. Source: Flickr

The government announced on Monday that farmers can purchase seeds with old notes of Rs 500 from state-owned outlets. They will need to produce a proof of identity for the same.

6. NABARD to disburse Rs 21,000 crore loans to farmers:

The Economic Affairs secretary announced that the National Bank for Agriculture and Rural Development (NABARD) has sanctioned an additional Rs. 21,000 crore to the District Central Co-operative banks to disburse as loans among farmers who need money to sow winter crops. He added that more money will be added according to farmers’ needs.

7. Rs. 50,000 withdrawal limit extended:

While earlier the weekly cash withdrawal limit of Rs 50,000 was applicable only for current accounts operational for the last three months and more, it has now been extended to people with current, overdraft and cash credit accounts as well. Those with personal overdraft accounts cannot avail the facility.

8. Micro ATMs for weavers and artisans:

demonetization2

Picture fore representation only. Source: Flickr

To help weavers and artisans, the government has decided that banks will deploy micro ATMs at handloom-handicrafts clusters. This will enable them to withdraw cash to buy raw material using the Aadhaar-enabled payment system. Local bank officers will mobilise these ATMs while officials of weavers’ service and marketing service extension centres will spread the information among weavers and artisans through SMS.

9. Rs. 10,000 cash advance for government Group-C employees:

Government employees belonging to Group-C have started receiving Rs. 10,000 in cash as advance for their salaries for November. About 1,000 employees in the Home Ministry have already received the advance.

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