Banks invited to extend their facility


The Reserve Bank of India has called on banks to extend the debit card cash withdrawal facility to more merchant establishments. RBI urged banks to facilitate such a facility for cash withdrawals on PoS (point-of-sale) devices enabled for all debit cards and open-loop prepaid cards they issue.

In a circular issued Thursday, the RBI said it had learned that the instructions had not been implemented “in letter and in spirit.” The central bank reiterated instructions to allow cash withdrawals at points of sale by cardholders.

According to RBI standards, the limit for withdrawing cash via debit cards on PoS devices is up to ??1,000 per day in level I and II centers and ??2,000 per day in level III to VI centers.

“To this end, banks may extend the cash withdrawal facility to any merchant establishment designated by them after a due diligence process,” the RBI said.

Customer charges, if any, on cash withdrawals via debit cards from point-of-sale devices must not exceed 1% of the transaction amount.

The RBI has asked banks to submit data on cash withdrawals on point-of-sale devices to the Payment and Settlement Systems Department, Mumbai, on a quarterly basis within 15 days of the end of the quarter.

In its 2015 circular, the RBI requested banks to provide such a cash withdrawal facility subject to the following conditions:

1) The facility is made available in merchant establishments designated by the bank after a due diligence process. These merchant establishments may be advised to clearly indicate / display the availability of this facility as well as the charges, if any, payable by the customer.

2) The function is available regardless of whether the cardholder makes a purchase or not. In the event that the facility is used with the purchase of goods, the generated receipt must separately indicate the amount of money withdrawn.

3) Banks offering this facility must have an effective redress mechanism for customers. Complaints in this regard will fall within the competence of the Banking Ombudsman Scheme.

Earlier this month, RBI said banks also cannot include non-cash withdrawal transactions such as balance request, checkbook request, tax payment, and fund transfer. as part of free transactions at automated teller machines.

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