Mulling linking number of cards issued by a bank to its PoS machines: H R Khan

H R Khan, deputy governor of RBI said the idea is to reduce the number of cash transactions in the country

To boost the growth of Point of Sales (PoS, enabling electronic retail transactions) machines, the Reserve Bank of India is thinking of whether to link the number of cards issued by a bank to the PoS machines it puts up.

“We just have 1.1 million machines and need much more. Only a few banks are putting the PoS machines. So, one thought, and not a final view, that when you are issuing a certain number of cards, additional issuances will be linked to the PoS machines you are putting up, so that there is acceptance in the infrastructure, particularly in the rural and semi-urban areas where more Kisan Credit Cards are becoming plastic cards,” said H R Khan, deputy governor of RBI.

He said the idea is to reduce the number of cash transactions in the country. With an increased spread of PoS terminals, this can be done significantly. It would also help banks cut on cash handling and management fees.

With the national financial inclusion plan and the number of RuPay cards being distributed, the regulator believes there will be an increased number of cards in the system and infrastructure is needed to support this.

Meanwhile, State Bank of India, the country’s largest lender, has asked RBI to increase the cash withdrawal limits from PoS machines to Rs 5,000.

“The average withdrawal at ATMs is Rs 3,654. Therefore, we believe that Rs 5,000 (at a PoS) will be an adequate amount. We wrote to RBI last month to increase the transaction limit,” said S K Mishra, deputy managing director.

SBI has been steadily expanding its PoS network and in this financial year, plans to add about 100,000 such terminals. Mishra said they were at number four position in the PoS market but believed they’d be able to clinch the first position by March 2016.