The government yesterday announced new measures to allow farmers and marrying couples to withdraw more money from banks, as frustration mounted over a cash crisis triggered by the withdrawal of all high-value notes.
The shock move last week, which saw 85% of the cash in circulation suddenly withdrawn, has led to huge queues forming outside banks as people rush to exchange old notes for new, and has thrown plans into disarray as the wedding season gets under way in the country.
The government has placed a weekly limit of Rs24,000 on withdrawals as banks struggle to cope with a shortage of cash and many ATMs run dry.
But Shaktikanta Das, secretary in the Department of Economic Affairs, said families planning a wedding would now be able to withdraw up to Rs250,000 in one go.
“Various representations were made to the government,” Das told journalists in New Delhi.
“(We) decided that for marriage ceremonies, up to Rs250,000 will be permitted to be withdrawn from the bank account and it has to be drawn from the father, mother or the person getting married.”
The sudden withdrawal of Rs500 and Rs1,000 notes – aimed primarily at tackling tax evasion – has created huge problems for families planning weddings in India where most people still use cash, even for large transactions.
That however did not stop a mining tycoon from hosting a lavish wedding ceremony for his daughter on Wednesday, taking over a royal palace in Bengaluru at a reported cost of Rs5bn.
Welcoming the government’s decision, Chander Das, a resident of Krishnanagar in east Delhi, whose younger brother is getting married tomorrow said: “It’s a big relief for us. Earlier we were worried how to make payments.”
Rohit Bhargav, a company executive, said he had deferred his wedding by a fortnight after the government’s demonetisation move. After yesterday’s announcement, Bhargav said he felt relieved.
“This is a welcome move of the government; this will really help people whose weddings are lined up in the coming days,” said Bhargava.
“I hope the cash crunch will ease and I will be able to withdraw money,” he said.
Paritosh Dikshit, who works in a bank and is to get married in December, admitted that banks have shortage of cash.
“There is gap between demand and supply. There is shortage of currency. No doubt it is a good move but it will not be easy to provide Rs2.5 lakh to customers in one go,” he said.
Agriculture has also been hit hard as farmers struggle to buy seeds and fertiliser with the winter crop-sowing season now under way. 
Das said farmers would now be able to withdraw a slightly higher amount – Rs25,000 – and would be given more time to repay government loans for crop insurance.
“Agriculture is an important component of our society,” he said.
“We are at the commencement of rabi (winter crop) season, and therefore to ensure that sowing takes place properly and farmers get smooth supplies like fertilisers, the farmers can withdraw up to Rs25,000 per week.”
The move sought to deter huge numbers of people queuing to swap cash repeatedly, some of whom are suspected to be acting on behalf of racketeers trying to launder “black cash” before a December 30 deadline for depositing or swapping old notes.
There was bad news, however, for anyone who did not fall into those two categories.
Das said the amount an individual can change from old notes to new would be reduced to Rs2,000 from Rs4,500 in an attempt to ensure that more people could get hold of at least some cash.