RESERVE BANK OF INDIA (RBI), vide notification dated 05th May, 2020 has issued 10 important FAQ’s on Cash Withdrawal Facility at Point of Sale (PoS) Terminals.
1. Which types of cards are allowed for withdrawing cash at PoS terminals?
Ans. Under the facility of cash withdrawal at PoS terminals, cardholders can withdraw cash using their debit cards and open system prepaid cards issued by banks in India. However, credit cards cannot be used under this facility. Cash can also be withdrawn at PoS terminals through Unified Payments Interface (UPI) as well as through use of electronic cards that are linked with overdraft facility provided along with Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts.
2. Is there any limit on the amount of cash that can be withdrawn under this facility?
Ans. Yes. Under this facility, a cardholder can withdraw cash up to Rs 2,000/- per day per card in Tier III to VI centres. At Tier I and II centres, the withdrawal limit is Rs 1,000/- per day per card.
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3. What are the charges for availing this facility?
Ans. Charges, if any, levied on cash withdrawals shall not exceed 1% of the transaction amount.
4. Is this facility available at all merchant establishments? How will I know if the facility is available at a particular merchant PoS?
Ans. No. The facility is made available at merchant establishments designated by the acquirer banks (i.e. the banks that deploy the PoS terminals) after a process of due diligence. The designated merchant establishments have to clearly indicate / display the availability of this facility along with the charges, if any, payable by the customer.
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5. Is withdrawal of cash using PoS terminals deployed by other banks (i.e. banks other than my card issuer) at designated merchant establishments permitted?
Ans. Yes. Under this facility, cash can be withdrawn from PoS terminal(s) at designated merchant establishment(s), irrespective of the fact whether the card issuer and the acquiring bank are same or not.
6. Is it mandatory for the cardholder to purchase some goods / service from the merchant establishment for availing this facility?
Ans. No. The facility is available irrespective of whether the card holder makes a purchase or not.
7. Will a receipt be provided for the cash withdrawn at PoS terminal?
Ans. Yes. The merchant is required to provide a printed receipt generated by the PoS terminal. In case the facility is availed along with the purchase of merchandise, the receipt generated shall separately indicate the amount of cash withdrawn.
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8. Where can a grievance in respect of this facility be lodged?
Ans. The cardholder can lodge grievance(s) with his / her card issuer. In case the card issuer does not respond within the stipulated time, or the reply so received is not satisfactory, the cardholder can lodge a complaint under the Banking Ombudsman Scheme / Ombudsman Scheme for Digital Transactions.
9. Does the acquirer bank need any permission from the Reserve Bank of India (RBI) for providing this facility at its PoS terminals?
Ans. No. The acquirer banks (other than local area banks) may, based on the approval of their Board, provide cash withdrawal facility at PoS terminals. The local area banks shall require the approval of RBI for providing this facility.
10. Where can more information about this facility be found?
Ans. More information about this facility can be found in the following circulars issued by the RBI –
- DPSS.CO.PD.No.147 /02.14.003/2009-10 dated July 22, 2009,
- DPSS.CO.PD.No.563 /02.14.003/2013-14 dated September 5, 2013,
- DPSS.CO.PD.No.449 /02.14.003/2015-16 dated August 27, 2015,
- DPSS.CO.PD.No.501 /02.14.003/2019-20 dated August 29, 2019 and
- DPSS.CO.PD.No.1465 /02.14.003/2019-20 dated January 31, 2020.
Source: RBI updates
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The author of the above article is CS Lalit Rajput, Partner at Xcede Consultech LLP.
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