Saturday, 28 January 2023

Cardless Cash Withdrawal soon to be Available at All Bank ATMs via UPI: RBI

Cardless Cash Withdrawal soon to be Available at All Bank ATMs via UPI: RBI

RBI, or Reserve Bank of India, governor Shaktikanta Das on Friday, April 8, announced that the RBI has proposed to make a cardless cash withdrawal facility available at all ATMs across all banks in India. The RBI governor announced decisions made at the three-day Monetary Policy Committee meeting. Shaktikanta Das said that the facility is proposed to be made available through the Unified Payments Interface or UPI.

Das said while making the announcement.

 "Currently, cardless cash withdrawal facility through ATMs is limited only to fewer banks. Now It is proposed to make cardless cash withdrawal facility available across all banks and ATM networks using the UPI,"

the RBI governor added.

"In addition to enhancing 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,"

UPI enables customer verification while settling such transactions, Nitin Mathur, CEO of Tavaga Advisory Services, said after the announcement. "This is a step toward digitalizing banking and can significantly reduce fraudulent transactions even though the monthly limit allowed is a bit restrictive. A rise in digitalization and adoption of digital banking channels has exposed the system to several frauds and cybercrimes. It is therefore important to ensure that these systems are not just efficient but also protected from emerging cyber security risks," he said.

Read More: GST high time collection of Rs 1.42 lakh crore in March

What is a Cardless Cash Withdrawal Facility?

As the name suggests, a cardless cash withdrawal facility does not require a bank customers to use their debit or credit cards while withdrawing cash from ATMs. The system is presently available at various banks and was introduced in the wake of the Covid-19 pandemic when several people were reluctant to go to the ATMs.

Cardholders of various banks, including SBI, ICICI Bank, Axis Bank, and Bank of Baroda, can withdraw cash even without their debit cards through their phones. The cardholder mostly has to use a mobile banking app and raise a request to withdraw some money at the ATMs if they do not possess their debit cards.

Experts say this system will curb ATM fraud as it uses a mobile PIN to generate cash; the cardless cash withdrawal system uses the UPI facility to carry out the work. The service operates by the remitter creating an IMT (Instant Money Transfer), which allows it to transfer money using only the beneficiary's mobile number.

The cardless cash withdrawal facility can be used for the self-withdrawal of money. However, not many banks have this facility yet, and there is a daily transaction limit. This ranges from Rs 10,000 to Rs 25,000, as per the facilities offered by the particular bank. A few banks presently also charge an additional transaction charge from their customers. With the RBI's new announcement, more banks are expected to join in to provide the service to its cardholders.

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