From February 20 one can with draw Rs 50000 from banks. The earlier Rs 24000 limit will be withdrawn according to sources.
On the other hand the Reserve Bank of India, widely expected to cut the repo rate, has kept the key lending rate unchanged at 6.25 per cent today, opting to wait for more clarity on inflation trends and on how Prime Minister’s crackdown on “black money” is impacting economic growth.
The central bank has been under pressure to lower borrowing costs to boost the economy, with the notes ban expected to drag economic growth to a four-year low for the year ending March 31, 2017.
Stock markets were also disappointed with the RBI’s decision with Sensex falling over 150 points. The RBI said that all six members of the monetary policy committee voted in favour of the monetary policy decision.
The monetary policy committee has also changed its policy stance to “neutral” from “accommodative”, which signals that RBI could go for a prolonged pause on further cuts, says an expert in financial matters.
In a statement, the RBI said, “The committee decided to change the stance from accommodative to neutral while keeping the policy rate on hold to assess how the transitory effects of demonetisation on inflation and the output gap play out.” 34 out of 39 economists in a Bloomberg survey had expected the Reserve Bank to cut the repo rate by 25 basis points today.
Falling inflation, a stable rupee and the government’s fiscal prudence in the Budget had given it some room to go for a rate cut, analysts said.
