Cash withdrawal limits at POS machines increased in rural areas
Close on the heels of announcing the in-principle nod for 11 applicants for the payments bank licence, the Reserve Bank of India (RBI), in a notification, said that it has increased the cash withdrawal limits for point-of-sale machines in rural areas. The apex bank enhanced the limit for cash withdrawal at POS for debit cards and open system prepaid cards issued by banks in India from Rs 1,000 to Rs 2,000 per day in Tier III to VI centres with immediate effect.
The RBI also said that customer charges levied on cash withdrawals, if any, will not exceed 1% of the transaction amount at all centres irrespective of the limit.
The RBI had introduced cash withdrawals at POS terminals via debit cards in 2009 and had instituted a maximum limit of Rs 1,000 then. In September 2013, it also extended the same to open system prepaid cards issued by banks. At the end of May, the total number of POS terminals in the country stood at 11,32,120 and the the total number of debit cards stood at 570,813,794. It also needs to be pointed out that India has the lowest POS terminal penetration in the world, according to a report by global consultancy firm Ernst and Young. The report further adds that there are only 693 machines per million of India’s population, compared to similar emerging countries such as Brazil, which has 32,995 terminals per million people and China and Russia, each of which has around 4000 terminals per million people.
EMV chip and PIN cards roll out deadline extended
Separately, the RBI also extended the deadline for migrating bank customers from magnetic stripe cards to EMV chip and PIN based cards. Accordingly, new magnetic stripe cards issued under the Jan Dhan Yojana will have to be replaced by September 30, 2015 and all other cards issued by banks will have to be migrated to EMV Chip and PIN based cards by January 31, 2016.
In May, the RBI had directed that all new cards issued by banks – debit and credit, domestic and international – shall be EMV Chip and PIN based cards by September 1, 2015. Existing magnetic stripe only cards will have to migrate to the new system by December 31, 2018 and banks will have to initiate steps for the same.