RBI had instructed to banks to allow cash withdrawal through PoS devices for all debit cards and open-loop prepaid cards.

RBI instructs banks to extend PoS cash withdrawal facility
Money RBI Friday, August 30, 2019 - 18:31

Do you know that soon you can use your debit card to draw cash at any merchant establishment if you need? You need not go searching for an ATM. The instructions to this effect were passed on to the banks by the Reserve Bank of India a few months back and the regulator has now told the banks once again to give due importance to this facility and see that it is implemented.

Once implemented, you can use your debit card at any merchant establishment that has the point of sale (PoS) machine to withdraw cash. The amount cannot exceed Rs 1,000 per day if you are in a Tier I or II city and Rs 2,000 if you are in any Tier II or IV city. The objective is to facilitate the availability of cash to the bank customers even if they can’t locate an ATM close to where they are. This facility can be very useful for people traveling and would want cash to pay minor expenses like local conveyance or for food. In a new place, one may not be familiar with the ATM locations etc. and this facility to draw Rs 1,000 or Rs 2,000 is a sound idea.

It has been reported that there will be some verification of the ID of the person before the merchant establishment allows him or her to swipe the card for cash. The amount will get credited at the time of settlement as far as the ME is concerned. There may be a nominal 1% fee charged for these withdrawals. RBI had included all debit cards and open-loop prepaid cards as well.

The central bank has now instructed the banks to send it a quarterly report on the instances of such withdrawals. The reports need to be sent by the bank to RBI’s Department of Payment and Settlement Systems, Mumbai.

Show us some love! Support our journalism by becoming a TNM Member - Click here.