Automated teller machines have put an end to long queues at bank tellers' windows. Now, long queues outside ATMs may also wither away.
The Reserve Bank of India has allowed withdrawal of cash from point-of-sale terminals, where customers swipe their credit or debit cards to pay for purchases. Noting that the use of debit cards has been steadily increasing, an RBI circular today said withdrawal of cash up to Rs 1,000 per day through debit cards issued in India was now being permitted.
At present, customers are only allowed to withdraw cash at ATMs. There are currently 44,857 ATMs in the country, while the number of PoS terminals at 4,70,237 is over 10 times higher.
RBI said customers could use the cash withdrawal facility at merchant establishments irrespective of whether they make a purchase or not. "This facility may be made available at any merchant establishment designated by the bank after a process of due diligence," the circular said.
Bankers have responded enthusiastically to the RBI circular saying it was a means of promoting financial inclusion. "It is a customer-centric step. Now customers will have many points for withdrawing cash," said R P Sinha, deputy managing director for information technology at State Bank of India.
"It is a good step as PoS terminals are much more easily available than ATMs," aid Aspy Engineer, vice-president for alternative channels at private sector Axis Bank.
However, bankers admitted that providing this facility would present logistical challenges for banks.
The circular is silent on the issue of withdrawal charges and whether this will be borne by the bank or the customer. There is also no mention of a timeframe for implementing this step.
An RBI official said banks would have to take a decision on service charges and whether they would pick up the tab or pass it on to customers. While no date was fixed for starting this facility, it would depend on bank managements in taking their board's approval and firm up the mechanism, the official added.
