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Tuesday, November 15, 2016

ATM fees waived, rural outreach bolstered as government urges caution

The government on Monday raised the current account withdrawal limiton Monday, waived surcharges on credit and debit cards, and stepped up the supply of cash to post offices as part of a string of new measures to ease fund flows across the country.

The Centre assured citizens that there was enough money in the system to meet their requirements, and urged them not to panic.

The measures were finalised at a meeting chaired by PM Narendra Modi late on Sunday, and The fresh measures come after the government eased the limits on cash withdrawal and exchange at bank branches and ATMs.

Economic affairs secretary Shaktikanta Das told reporters that it was decided to activate all channels to augment the flow of cash in the banking system. To ease the pain in rural areas, banks will increase the cash-holding limit of banking correspondents (see inset) to Rs 50,000 each, and allow higher limits in some cases. Banking correspondents, who carry out banking activities on behalf of banks in rural and remote areas, can replenish money from banks multiple times a day. There are 1.2 lakh banking correspondents across the country.

The government also decided to increase the supply of cash to about 1.3 lakh post offices in the country. "With 1.2 lakh banking correspondents and 1.3 lakh post offices getting further activated, a total of 2.5 lakh points in rural areas will be available to disburse cash and facilitate cash withdrawals," Das said.

To make life easier for small businesses, the government allowed business entities with current accounts operational for the last three months or more to draw Rs 50,000 per week. "This can be done in a single transaction or multiple transactions. This will enable small business entities to pay wages to their workers and make sundry payments," he said.

To promote electronic payments and ease pressure on banks, all central government departments and public sector enterprises have been told to use e-payments to a large extent. The RBI has advised the National Payments Corporation of India (NPCI) to waive its charges on transactions settled through National Financial Switch till Dec 31.

Credit and debit card users have something to cheer about as banks have been told to waive surcharges. To step up the process of recalibration of ATMs, a task force has been set up under a deputy governor of RBI that consists of representatives of banks and the finance ministry.

Source:-The Times of India

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