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Update: Can Grofers offer cash withdrawals from YES Bank’s POS machines?


Yesterday, grocery delvery startup Grofers announced that it is partnering with YES Bank where it would allow customers to request for a POS machine on delivery to withdraw cash. However, it is contingent on a customer ordering from the service and entering a code to get cash at POS.

An earlier report from PTI mistakenly stated that customers will have to make a minimum order of Rs 2,000 on the website or app. YES Bank and Grofers later clarified that there is no minimum order for requesting the POS machine.

But it seems the they are still in violation of Reserve Bank of India norms where it says that a customer will be allowed to avail  cash at POS regardless of whether they make a purchase at a store.

Such cash withdrawal facility may be provided by banks subject to following conditions:

The facility is available irrespective of whether the card holder makes a purchase or not. In case the facility is availed along with the purchase of merchandise, the receipt generated shall separately indicate the amount of cash withdrawn.

A Change.org petition points out that with Grofers making sure that there is a purchase order for availing cash at POS, it is making cash a commodity to be sold. The petition is also asking the Reserve Bank of India (RBI) to issue clear instructions to banks saying that cash is not a commodity to sell in business partnerships.

Albinder Dhindsa, co-founder of Grofers sent a statement to MediaNama which said that since it is an ecommerce company which aggregates merchants, the minimum order on the app and website is determined in conjunction with their sellers. The full statement:

The RBI guideline for Cash @ PoS was made in the context of brick – mortar shops where the customer walks in and there is a physical PoS (connected to landline). In today’s scenario, e-commerce is taking the shop to the customer and the PoS is being carried by our delivery boy. So where the RBI guideline is clear that merchant cannot require a customer to purchase something to avail Cash @ PoS; in e-commerce scenario, without a purchase the delivery boy won’t go to customer’s home. Simply put, in a physical shop, customer entering the shop predates a purchase, in e-commerce making a purchase predates the shop / delivery coming to your home. RBI has now clarified that there should not be any minimum purchase order size for customers opting to avail Cash @ PoS facility and we are complying with the same. Since we are an e-commerce marketplace, the minimum order size on app / website is determined in conjunction with our sellers. We have now aligned the sellers to co-operate for this well meant effort to benefit customers within RBI’s guidelines.

So far, Grofers has extended this facility to customers in Mumbai, Bangalore, and Gurugram and they will have to place the request for cash at POS through a code.

Following the demonetization of Rs 500 and Rs 1000 notes, many large retail stores in India, most notably Future Group’s stores, have started to offer cash at POS where customers can swipe their cards to get cash (subject to RBI’s current limits). I have visited a supermarket near my house which does allow me to withdraw cash but does not require me to make a purchase at the store and issues a separate receipt for the same.

Note that YES Bank has also partnered with Ola  to deploy cash at POS in 10 cities including Mumbai, Delhi, Bangalore, Chennai, Pune, Kolkata, Chandigarh, Ahmedabad, Hyderabad and Jaipur. But in this case, the cabs would be deployed across 30 YES Bank locations in these 10 cities.  Bank officials or the driver will be present on the spot to disperse the debited amount to the user.

Update: The story was edited from an earlier version for clarity following replies from Grofers and YES Bank regarding the Reserve Bank of India notification. 

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