New Delhi: The Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced that the central bank has proposed to make a cardless cash withdrawal facility available at all ATMs across all banks in India, further reducing the need for debit cards and promoting the digital economy.
While announcing decisions made at the three-day Monetary Policy Committee (MPC) meeting, Das said that the facility is proposed to be made available through the Unified Payments Interface or UPI.
At the moment, only a restricted number of ATMs and banks offer cardless cash withdrawals, and implementation varies per bank.
“At present, the facility of cardless cash withdrawal through ATMs is limited only to a few banks. It is now proposed to make cardless cash withdrawal facility available across all banks and ATM networks using the UPI," Das said while making the announcement.
The cardless cash withdrawal function, as the name implies, allows you to withdraw cash from ATMs without using your debit or credit card. This feature was implemented during the Covid-19 pandemic when touchless transactions were advocated to assist limit coronavirus spread.
UPI will not only standardise cardless cash withdrawals, but it will also lessen the possibility of card cloning and other similar scams.
“In addition to enhancing the ease of transactions, the absence of the need for physical cards for such transactions would help prevent frauds such as card skimming, card cloning, etc," the governor added.
It is intended to be more standardized now that UPI has been included as an option, however, the rollout may still take some time.
In this context, the RBI will give separate directions to the NPCI, ATM networks, and banks soon.
How do the current cashless withdrawals work?
A cardless cash withdrawal transaction allows you to transfer money from your bank account to anyone in India who has a valid domestic mobile phone number.
The beneficiary can withdraw the funds from any Bank ATM without using a Debit or Credit card.
All you need to transfer payments using this service is the payee's mobile number.
The payee can withdraw cash from cardless cash withdrawal Bank ATMs located throughout India without the use of an ATM/Debit Card.
To receive the transaction amount in cash, the payee must input his or her cellphone number, 4-digit and 6-digit verification codes, and the total amount on the ATM.
Cardless cash withdrawal requests can be initiated for as little as Rs 100 for each transaction and as much as Rs 10,000 per day or Rs.25,000 per month for a beneficiary (The limits are subject to change as per regulatory guidelines).
Advantages:
Send and receive money to any location in India.
Send cash 24 hours a day, seven days a week, including holidays.
The beneficiary is not required to have a bank account.
A broad network of Bank ATMs is accessible for cash withdrawal.