Government Takes Steps To Ease Impact From Ban On High Value Notes: Key Facts

Mumbai: Prime Minister Narendra Modi shocked the country on November 8 by abolishing Rs 500 and Rs 1,000 notes, which accounted for 86 per cent 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 from its measures. They are detailed below in chronological order.

December 8

The government announces incentives on retail purchases of some products on cashless transactions

December 7

The RBI withdraws temporary order for banks to place deposits under cash reserve ratio

December 2

The government raises limit for market stabilisation bonds to Rs 6 trillion to absorb extra liquidity

December 1

The government says old Rs 500 notes can no longer be used at petrol stations, airline ticket counters

November 30

• The RBI allows banks to use all cash to meet hiked cash reserve requirement ratio
• The central bank tightens monthly withdrawal rules from Jan Dhan accounts for the poor

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

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

• The government stops over the counter exchange of old banknotes; can only be deposited
• The government to ensure adequate cash supply for pensioners, armed forces personnel
• It allows certain payments in old Rs 500 notes including at tolls, hospitals for limited time

• The 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 50,000 rupees from PPIs to banks til December 30
• Monthly limits on transactions via PPIs raised to Rs 20,000 for Rs 10,000 til December 30
• The RBI asks state-run Nabard to disburse up to Rs 23,000 crore for crop loans

• The RBI allows cash withdrawal of up to Rs 2,50,000 for wedding-related expenses
• The central bank allows farmers to withdraw up to Rs 25,000 a week from their loan, deposit accounts
• The RBI gives small borrowers 60 more days before loans of up to Rs 1 crore are marked substandard
• The government allows farmers to purchase seeds from state-run outlets with old Rs 500 notes

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

• The RBI raises cap on weekly cash withdrawals from banks to Rs 24,000 from Rs 20,000 
• It 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
• It waives ATM fees for all transactions by savings bank customers til December 30
• The government increases withdrawal limits at recalibrated ATMs to Rs 2,500/day from Rs 2,000 

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

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