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RBI Refuses to Hike Cash Withdrawal Limit for Poll Candidates, Earns EC's Ire

The Reserve Bank of India (RBI) has rejected the request of the Election Commission to enhance the weekly cash-withdrawal limit, imposed after demonetisation, for those contesting Assembly elections in five states, prompting an angry reaction from the poll panel.

Press Trust Of India

Updated:January 29, 2017, 6:28 PM IST
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Reserve Bank of India.
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New Delhi: The Reserve Bank of India (RBI) has rejected the request of the Election Commission to enhance the weekly cash-withdrawal limit, imposed after demonetisation, for those contesting Assembly elections in five states, prompting an angry reaction from the poll panel.

The Commission had on Wednesday requested RBI to enhance the withdrawal limit of candidates to Rs 2 lakh from Rs 24,000 per week imposed post demonetisation as the nominees would find it difficult to meet their campaign expenditure. But RBI said that it was not possible for it to hike the limit at this stage.

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An apparently peeved Commission has now written back to RBI Governor Urjit Patel expressing "serious concern about the cursory manner in which the issue has been dealt with".

"...(It) appears that the RBI has not realised the gravity of the situation...It is reiterated that it is the constitutional mandate of the Commission to conduct free and fair elections and to provide level-playing field to all candidates... in order to facilitate proper conduct of elections, it is imperative that directions issued by the Commission are complied with," the poll panel said.

It urged the central bank to reconsider the proposal. On Wednesday, the Commission had told RBI that it has been apprised of the problems candidates were facing due to withdrawal limits imposed after the note ban.

It said the returning officer of the constituency would issue certificate that the person was a candidate in the fray and the contestant be allowed to withdraw Rs 2 lakh cash per week from the bank account opened especially to meet poll expenses.

The EC said the facility be extended till March 11, the day of counting. Candidates are bound to open an election account for meeting poll-related expenditure which is monitored by the EC.

The Commission said that with a weekly withdrawal limit of Rs 24,000, a candidate would be able to withdraw Rs 96,000 in cash during the election process which lasts three to four weeks.

It reminded the central bank that as per law, candidates contesting Assembly polls in Uttar Pradesh, Uttarakhand and Punjab can spend Rs 28 lakh each for electioneering.

The limit in Goa and Manipur is Rs 20 lakh each. The poll panel said despite paying amounts through cheques, candidates still need hard cash for petty expenses. Also the issue is further adversely effected in rural areas where banking facilities are negligible.

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| Edited by: Nitya Thirumalai
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