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| From next year, withdraw cash at shops for Rs 10-15 |
| Sudeep Jain / Mumbai Nov 26, 2009, 00:48 IST |
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Customers will soon be able to walk into a shop having a point-of-sale terminal and withdraw up to Rs 1,000 using their debit cards. Industry sources said banks will restrict the charges to Rs 10-15, given the low-ticket size of transactions.
Public sector lender Union Bank of India is aiming to offer the facility by December 31. Corporation Bank is also preparing its PoS infrastructure and hopes to start offering this facility in the next two months. Most banks are expected to offer the service in the coming months.
In July, the Reserve Bank of India (RBI) had issued a circular permitting cash withdrawals of up to Rs 1,000 per day from point-of-sales (PoS) terminals at merchant establishments. PoS terminals are machines where customers can swipe their credit or debit cards to pay for purchases. “We are fully prepared to offer this facility. Customers in remote locations who do not have ready access to ATMs will be the biggest beneficiary of this facility,” said Pravin Bansal, General Manager, Transaction Banking, at Union Bank.
Its board will consider the proposal to offer this facility when it meets next month, following which Union Bank will seek the RBI’s nod.
Both banks are aggressively expanding their PoS networks. Union Bank plans to have 25,000 PoS terminals by end-March 2010. Earlier, Corporation Bank entered into a deal with Prizm Payments for the setting up of 100,000 PoS terminals in the next two to three years.
At the end of March this year, there were around 427,000 PoS terminals. ICICI Bank had a 42 per cent share, followed by Axis Bank with 27 per cent of the pie, according to a report by Venture Infotek Research.
Once this service is rolled out, other banks are expected to follow. The charges will be lower than those for third-party ATM withdrawals, since the costs for the banks will also be lower. At present, most banks offer five free third-party ATM withdrawals a month to savings account customers and thereafter charge Rs 18-20 per transaction. Banks mainly save on cash replenishment charges, since the cash is present with the merchant. A bank executive said this could also be a current account/savings account (CASA) acquisition strategy, since every merchant offering this facility will necessarily have to open a current account with the acquiring bank.
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