India takes steps to ease impact from banknote ban

New Deihi - The move was aimed at cracking down on the shadow economy, but has brought India's cash economy to a virtual standstill.

By Reuters

Published: Tue 29 Nov 2016, 9:53 AM

Last updated: Tue 29 Nov 2016, 12:18 PM

Prime Minister Narendra Modi shocked the country on Nov. 8 by abolishing 500 and 1,000 rupee 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.

NOV. 28
Govt announces tax amnesty scheme for unreported cash; will charge 50 pct in taxes, surcharges People would also have to park quarter of total sum in non-interest bearing deposit for 4 yrs RBI to allow withdrawals above 24,000 rupees weekly limit of deposits made in legal tender.
Those withdrawals would be in new 2,000, 500 rupee bills
NOV. 26
RBI says banks need to temporarily transfer deposits between Sept. 16 and Nov. 11 under CRR
NOV. 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 5,000 rupees per week till Dec 15
NOV. 24
Govt stops over the counter exchange of old banknotes; can only be deposited
Govt to ensure adequate cash supply for pensioners, armed forces personnel
Allows certain payments in old 500 rupees notes including at tolls, hospitals for limited time
NOV. 23
India govt says will offer 210 billion rupees in farm credit to farmers
NOV. 22
RBI sets balance kept in prepaid wallets, cards (PPIs) at 20,000 rupees from 10,000 till December 30
Merchants can transfer up to 50,000 rupees from PPIs to banks till Dec 30
Monthly limits on transactions via PPIs raised to 20,000 rupees for 10,000 till Dec 30
RBI asks state-run Nabard to disburse up to 230b rupees for crop loans
NOV. 21
RBI allows cash withdrawal of up to 250,000 rupees for wedding-related expenses
RBI allows farmers to withdraw up to 25,000 rupees a week from their loan, deposit accounts
RBI gives small borrowers 60 more days before loans of up to 10 million rupees are marked substandard
Govt allows farmers to purchase seeds from state-run outlets with old 500 rupee notes
RBI sets limit of cash withdrawal at card swiping machines at 2,000 rupees per day
NOV. 18
Govt allows farmers to withdraw up to 25,000 rupees a week against the crop loans
NOV. 17
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 2,000 rupees from 4,500
NOV. 15
Govt says banks must use indelible ink to ensure people change cash only once
NOV. 14
Extends deadline for payments in old notes including for petrol for limited time
NOV. 13
RBI raises cap on weekly cash withdrawals from banks to 24,000 rupees from 20,000
Removes per-day withdrawal limit cap of 10,000 rupees
Raises limit for over-the-counter exchange of old bills at banks to 4,500 rupees from 4,000
Waives ATM fees for all transactions by savings bank customers till Dec. 30
Govt increases withdrawal limits at recalibrated ATMs to 2,500 rupees/day from 2,000 rupees
NOV. 11
Extends deadline for payments in old notes including for petrol for limited time
NOV. 8
India abolishes 500, 1,000 rupee notes in fight against 'black money'
500, 1000 rupee notes must be tendered into banks, RBI by Dec. 30
Caps exchange of old bills over-the-counter at banks at 4,000 rupees
Caps cash withdrawals from bank accounts at 10,000 rupees per day till Nov 24
Caps cash withdrawals from bank accounts at 20,000 rupees per week till Nov 24
Caps cash withdrawals from ATMs at 2,000 rupees per day per card till Nov. 18
Caps cash withdrawals from ATMs at 4,000 rupees per day per card from Nov. 19
Allows certain payments in old notes including for petrol for limited time