India central bank relaxes cash withdrawal limit with immediate effect

India's central bank on Monday relaxed cash withdrawal limits from automated teller machines (ATMs) and current accounts with immediate effect.

The Reserve Bank of India (RBI) has allowed individuals to withdraw up to Indian Rs10,000 ($146.84) per debit card per day from ATMs, higher than the Rs4,500 currently. However, the overall weekly withdrawal limit of Rs24,000 per card remains unchanged, it said in a release.

The central bank also increased the withdrawal limits from current accounts to Rs100,000 per week from Rs50,000 earlier and said this facility will also be extended to overdraft, cash credit accounts.

The RBI had imposed these limits in November after the government announced a ban on all high-value currency notes, and said it would replace them with new notes.

The withdrawal limits are unlikely to be removed completely until the RBI has supplied the economy with sufficient amount of new notes, analysts said.

India is still reeling from Prime Minister Narendra Modi's shock decision in November 2016 to pull 86 per cent of the currency from circulation overnight, triggering a chronic shortage of notes in an economy that operates almost entirely on cash.

“To break the grip of corruption and black money, we have decided that the 500 and 1,000 rupee currency notes presently in use will no longer be legal tender from midnight that is 8 November, 2016,” he had said in a televised address to the nation.