RBI reiterates to Banks & card COs to allow cash withdrawal through swipe machines
Mumbai, 07 September 2019: Are you aware that besides automated teller machine (ATM), which dispense cash as and when it is required by you, there is another source which can be tapped by the consumers when they are in need of money and ATM is not available to them. It is the Point of Sales (PoS) machine that can come to your help.
In order to ensure sufficient cash is available to the people at every nook and corner of the country, the Reserve bank of India (RBI) has reiterated its instruction to all the commercial banks and authorised card networks to allow cash withdrawals through point of sales (PoS) (swipe) machines.
The cash withdrawals through PoS devises were enabled for all debit cards and open loop prepaid cards issued by Banks since 2009. The instructions outlined therein by RBI, limits the cash withdrawals upto to Rs 1000/- per day in Tier I and II centers and upto Rs 2,000/- per day in Tier III to VI centers. The higher limit of withdrawal set for Tier III to VI is with the assumption that these centers may not have high proliferation of ATM network. RBI had also said that customer charges, if any, on such cash withdrawals to be not be more than 1 per cent of the transaction amount.
The central government demonetized old currency notes of Rs 500 and Rs 1,000 in November 2016, which resulted in tight liquidity situation across the country. In order to overcome the liquidity issue, government in association with the RBI had then announced several measures. One such measure that was aggressively implemented was allowing people to withdraw cash through PoS.
However, RBI said in its recently released circular, it has come to our notice that consumers are not allowed to withdraw money though PoS and central bank’s instructions have not been implemented in letter and spirit. “The instructions issued in the circulars on the subject are, therefore, reiterated with a view to provide for cash withdrawals at PoS by card-holders. To this end, banks may extend the facility of withdrawal of cash at any merchant establishment designated by them after a due diligence process”, the RBI said.
RBI has also made it mandatory for all the Banks to file quarterly reports detailing data on cash withdrawals at PoS devices within a fortnight of closure of the quarter. This exercise for the banks will begin from the quarter ending September 2019.