What is a current bank account?
A current bank account is that type of an account in which a bank states no limit on the number of transactions per day. Most banks do not provide an interest on your balance in this account, in fact some charge a certain fee for the services. Account holders do not use this account for investment purposes. Usually such an account benefits a businessmen as it is a flexible account providing no transaction limits thereby assisting the business with supply of liquid cash. It might be a prerequisite in certain banks to hold a minimum quarterly balance which can range between Rs5000 – Rs10, 000.
Demonetization and Current Account scheme
However, adhering to all the norms specified by the bank and providing them with the prescribed documents is all you need to become a current bank account holder in India. On November 8th the Modi government announced the demonetization of Rs.500 and Rs.1000 notes. In an attempt to curb black money off the economy Indians were dumbstruck by this move as the news was not leaked by anyone to the public before the date. The people were coerced into following new rules which were temporary withdrawal and deposit limits. However, burden on businessmen were reduced as the withdrawal and depositing limit was considerably moderated for all current bank accounts. While there was a sudden cash crunch and people throughout the country felt short of currency notes, the government tried to promote the concept of a digital economy.
Within a week of post-demonetization, the government in an attempt to help the businessmen in the country raised the withdrawal limit to Rs.50, 000 a week. However, it remained Rs.10, 000 a week for savings bank account holders, which was later increased to Rs.13, 500. Between the 10th of November and the 31st of December all cash deposits in a current account of up to Rs.2, 50,000 were not the subject of any questioning from the Indian Income Tax Department, however, any amount above that was. Shaktikanta Das, the secretary of economic affairs, informed the press that the RBI had enough cash and a plan to distribute the notes throughout the country within 3 months. The government would make use of this period to detect unusual activity and at the same time try to help the public, either by easing the cash rules (spending old notes and increasing withdrawal and depositing limits) or by improving flexibility and scope of digital transactions.