EC likely to ask candidates to open current accounts after RBI relaxed withdrawal norms

NEW DELHI: The Election Commission is set to ask candidates contesting assembly polls in five states to open current accounts to sidestep the limits in place for saving accounts after the RBI’s latest circular on Monday removed all limits on cash withdrawal from current accounts.

The EC-RBI confrontation was sorted out after the highest levels of the government swung into action. On Sunday, the Election Commission had expressed displeasure to the RBI for rejecting its request to enhance the cash withdrawal limit for candidates to `2 lakh per week.

Responding to the rather strong second communication from the EC, the RBI made it clear that it was against selective exemptions and refuted the charge of not seriously examining the EC request on enhancing withdrawal limit for candidates contesting elections, a person privy to the development told ET.

The EC had written to RBI Governor Urijit Patel expressing ‘serious concerns’ about the ‘cursory manner’ in which the EC’s previous communication was dealt with. RBI did not respond to ET’s queries.

While there was a withdrawal limit of `50,000 on current accounts post-demonetisation, the limit was raised to Re 1 lakh earlier this month. It is learnt that at the meetings held earlier on Monday, the EC was explained how it would not have been proper for the RBI to make withdrawal exceptions for the political class and, hence, the difficulty in acceding to the request made by the EC last week.

It was also pointed out that the EC had overlooked the more relaxed regime available to current account holders and had that route been examined, such an open confrontation with the RBI on the matter would not even have risen.

In its second letter to the RBI on Sunday, the EC had urged it again to revisit the proposal. It sought to remind the RBI governor that it is the constitutional mandate of the EC to provide a level playing field to all candidates and that the cash withdrawal limit per week must be enhanced.