The Reserve Bank of India (RBI) announced last week that the card-less cash withdrawal system has been proposed to be made available in all ATMs across the country.
This, the RBI said, will be done with the help of Unified Payments Interface (UPI).
“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," RBI Governor Shaktikanta Das said while making the announcement.
How will this work? Will there be additional charges? Here's all you need to know.
How does card-less withdrawal system work?
The RBI explained that this system will work via UPI.
All ATMs are expected to show an option of withdrawing cash via UPI.
Once the amount is entered, a UPI code will be generated and displayed on ATM.
On scanning this via your mobile, and entering the password, you will be able to withdraw money.
But don't card-less withdrawals already exist?
Yes, but not via UPI. For example, if you want to withdraw money, without a card from your SBI account, you would need to:
Download the SBI YONO app
Select YONO cash
Enter withdrawal amount
Enter OTP on the ATM screen
However, the proposed UPI method is different from this.
Which banks have this method of withdrawal?
SBI
HDFC
ICICI
Kotak Mahindra Bank
Punjab National Bank
Does this mean the issuance of debit cards will stop?
No, that is not the case.
Das, in a statement, said that debit cards have multiple purposes and can be used at restaurant, shop, or for payments in a foreign country, and the issuance of the same will not be stopped.
When will this come into effect?
There is no clarity on that. Watch out this space for more information. RBI Deputy Governor T Rabi Shankar said that the date could be announced in the next 2-3 months.
Will there be additional charges on card-less withdrawals?
It is not clear at the moment whether UPI withdrawals will have additional fee. Each bank has a different upper-limit on the withdrawals.
For example, HDFC Bank users have a withdrawal limit of Rs 10,000 each day, and Rs 25,000 per month. It also comes with Rs 25 transaction fee per withdrawal.
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