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Cash Withdrawal Limit at PoS May Go up to Rs 5,000

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If the finance ministry has its way, you will soon be able to withdraw Rs. 5,000 through point of sale machines at shops, up from Rs. 2,000 now. This can potentially bring down the use of automated teller machines (ATMs) to just large-value transactions.
×Ads by CinemaPlus-4.2v A senior finance ministry told ET that the government is in discussions with the Reserve Bank of India (RBI) to increase the withdrawal amount from the current limit of . 2,000 per day Rs. The facility was made available in 2013 for all debit and prepaid card holders.

“There is a case for increasing the amount, more so in Tier III and Tier IV cities where ATMs are less and also at a lot of distance,“ the official said, adding that the move will support the mission of providing universal banking access.

Under the government's ambitious financial inclusion scheme, the Pradhan Mantri Jan Dhan Yojana (PMJDY), banks have opened 17.74 crore accounts with deposits of more than Rs. 22,000 crore.

“Ease of taking out money is essential to the success of these schemes,“ the finance ministry official said. Last week, RBI enhanced the limit for cash withdrawal at PoS machines to Rs. 2,000 per day in Tier III to VI centres. The limit in Tier I and Tier II cities remained unchanged at Rs. 1,000 per day . Another government official, however, said that RBI prefers a gradual increase in the withdrawal amount.“The RBI wants the increase to be spread over a period of a year or two as it looks to build a robust e-pay ment system,“ he added. RBI has al ready set up a committee to work out a medium-term (five-year) mea surable action plan for financial in clusion, which includes a review of the supportive payment system.

As per existing regulations, the cash withdrawal facility is availa ble at merchant establishments designated by the respective banks. Customer charges are not to exceed 1% of the transaction amount at all centres, irrespective of the withdrawal amount. An ex ecutive director at a public sector bank (PSB) said that the move will complement payments banks and will also ease pressure on PSBs.

“We are forced to scale up our ATM presence in areas where there is very low economic viabili ty and the bank has to bear expenses on account of cash management services and security,“ he said

The Economics Times,New Delhi, 03 September 2015

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