Tue, Dec 6, 2016 | updated 08:26 AM IST

ASSOCHAM makes plea to FM for relaxing cash withdrawals for industry

Updated: Dec 02, 2016 12:31 IST

New Delhi [India], Dec.2 (ANI): ASSOCHAM has urged the government to consider lifting the cash withdrawal limit for the corporate firms from the banks, as there is no scope for any misuse since such withdrawals are properly recorded, audited and can be subject to scrutiny by any authority including the tax departments.

"The withdrawal limit of Rs 50,000/- per week from the current account is very less for industry. Therefore it needs to be enhanced, and the industry should not be subject to any limit because cash withdrawn by industry is duly recorded, audited and scrutinised by the government authorities such as Income Tax Department etc," said ASSOCHAM in a letter to the Finance Minister Mr Arun Jaitley.

The ASSOCHAM letter also sought restructuring of the bank loans and repayments schedules for a large number of industries, particularly in the small scale sector, which has been hit by the demonetization of high value notes.

Expressing apprehensions that the companies which are dependent on the banks and institutions for finance would be hit, the chamber said, "in such a situation the borrowers particularly the private limited companies and MSME sector would default in loan repayments/interest payments. Under this state of affair, the industry would require rescheduling of payments of loans as well as additional financial support to meet the liquidity requirement without any penal action".

Further to ease the problems of the retail customers and small traders, the chamber suggested that the "Government may think of issuing cash cards (like metro card) so that even a person who does not have bank account can carry this card and can use it as Debit/Credit card for making payments".

It said speedy distribution of cash is necessary so that people have confidence that sufficient cash is available in the system and there is no need of holding extra cash in hand

The ASSOCHAM letter to the Finance Minister said the industry has day to day expenses of small nature such as repair & maintenance, staff welfare, consumable items and loading and unloading. These are incurred in cash and are mainly paid to people in the unorganised sector who do not accept cheques. Till the economy largely converts into cashless economy industry will face problem in its day to day expenses.

The chamber also suggested that network of banks in rural areas should be spread so that every village has bank and ATM machines. (ANI)