The Government on Monday decided to adopt three-pronged strategy in order to peacefully deal with the prevailing cash chaos across the country due to demonetisation.
Further easing norms for cash-strapped farmers, the Finance Ministry on Monday permitted them to use old Rs500 notes for purchasing seeds from any State or Central Government outlets and agriculture universities on production of proof of identity. The Finance Ministry asked banks to provide resources to cooperative institutions with which they are associated to meet cash requirements of the farm sector during the ongoing Rabi season.
Meanwhile, the RBI on Monday provided additional 60 days for repayment of housing, car, farm and other loans worth up to Rs 1 crore. This is applicable to loans payable between November 1 and December 31, the RBI said in a notification. “… it has been decided to provide an additional 60 days beyond what is applicable for the concerned regulated entity for recognition of a loan account as substandard,” it said.
However, the RBI imposed stiff conditions for withdrawal of up to Rs2.5 lakh in cash from bank accounts for marriages, saying the money can be withdrawn only from the credit balance as on November 8, the day demonetisation was announced.
While notifying norms, RBI said the cash withdrawn should be used only to make payment to those persons who do not have bank accounts and the names of such recipients should be mentioned while applying for withdrawal of the cash for weddings.
The application for withdrawal should also provide names of bride and groom, their identify proofs, addresses and date of marriage. The amount can be withdrawn only if the date of marriage is on or before December 30, 2016.
Finance Minister Arun Jaitley said, “We had a discussion with RBI, Nabard and all public sector banks, and the only item for discussion was with regard to transfer of resources to rural areas so that they reach the farmers since the sowing season for Rabi is on and a lot of this will happen through the cooperatives itself.”
The central bank said term loans, whether business or personal, secured or otherwise, the original sanctioned amount of Rs 1 crore or less, on the books of any bank or any NBFC, including NBFC (MFI) would also get benefit of the 60 days relaxation. The apex bank further said the dues payable before November 1 and after December 31, 2016, will be covered by the extant instruction for the respective regulated entity with regard to recognition of NPAs.
Further relaxing cash withdrawal norms, the RBI also said overdraft and cash credit account holders can now withdraw up to Rs 50,000 in a week. Earlier, current account holders were allowed to withdraw up to Rs 50,000 in cash per week.