No hike in withdrawal limits for netas as RBI votes against EC plea

NEW DELHI: The Reserve Bank of India is said to have turned down the Election Commission’s plea to relax weekly cash withdrawal limits for poll expenses, which means candidates in upcoming contests in five states will have to increase their reliance on digital payments systems or cheques.

“RBI has rejected the request,” said a person aware of the development. The Election Commission had suggested a weekly limit of Rs 2 lakh against the current Rs 24,000 permitted for individuals. RBI did not respond to queries sent by ET. Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa will hold elections in February and March.

The limits were imposed as part of the demonetisation exercise announced on November 8. There have been media reports that these may be relaxed by the end of February as new currency notes are printed and enter the system. The use of cash in elections is typically kept under close watch by tax authorities and election authorities.


Candidates have to open an election account for meeting poll-related expenditure that’s monitored by the EC.

The commission’s contention had been that a weekly withdrawal limit of Rs 24,000 translated into a monthly withdrawal of Rs 96,000. That compares with the Rs 28 lakh that candidates contesting assembly polls in Uttar Pradesh, Uttarakhand and Punjab are allowed to spend on electioneering.

The limit in Goa and Manipur is Rs 20 lakh. The EC had taken a sympathetic view of candidates’ requests regarding cash withdrawals and made a formal request to the RBI.

It had said that candidates needed cash for petty expenses even though they had the option of paying by cheque. The commission had also said that candidates would find it difficult to meet campaign expenditure and that constituency returning officers could authenticate their identity. EC had wanted the higher withdrawal limit to be available till March 11, the day of counting.