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India's Demonetization Drama, Explained

Capital Controls
Capital Controls

Along with demonetization, the central bank also imposed capital controls, placing a cash withdrawal limit of 2,000 rupees a day on bank deposits, which was partially relaxed in the following days. Exchange of old currency notes were limited up to INR 4,000 a day.

Separate limits were set for ATM withdrawals, while fund transfers using cheques, mobile and Internet banking and other such digital platforms are free from any control. As of December 10, cash withdrawal from a bank account is limited to 24,000 rupees a week.

Relaxations on this limit have been made for wedding needs, almost always lavish affairs in India, and for farmers.