RBI asks banks to supply 40% of notes to rural areas

Mumbai: To mitigate hardships of poor and marginal farmers due to cash deficit following demonetisation, the Reserve Bank today directed banks to distribute at least 40 per cent of currency notes in rural areas.
The 50-day exercise ended on December 30, but the cash supply situation is yet to ease in certain pockets.
As a result, the government has not lifted the withdrawal ceiling of Rs 24,000 per week.
On observing that bank notes being supplied to rural areas is not commensurate with the local requirements, some steps have already been initiated, RBI said in a notification.
With a view to ensuring at least 40 per cent bank notes are supplied to rural areas and mitigating the issue in a more enduring manner, the banks maintaining currency chests are advised various steps, including liberal issuance of the existing stock of other denomination notes below Rs 100.
“Banks should advise their currency chests to step up issuance of fresh notes to rural branches of rural and commercial banks, white label ATMs and post offices in rural areas,” it said. (PTI)