The recently adopted provision allows cardholders to withdraw up to USD 20 (ING 1,000) every day using their debit cards. RBI has not as yet indicated when the debit card-based cash withdrawal system will go live. This is due to the fact that a number of POS terminals will have to be upgraded to perform the cashback function. No mention was made regarding the fees charged for POS withdrawals, however the same source estimates charges of between 2 and 3 percent of the amount withdrawn. It is also possible that banks and retailers may chose to divided the fee between themselves in order to encourage retailers to adopt the service.
The move aims to encourage debit card use by Indian consumers. Also, given that POS machines largely outnumber ATMs, RBI hopes the new service will facilitate consumers’ access to cash outside bank branches.
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