The Reserve Bank of India, in its monetary policy announcement today, said interoperability in cardless cash withdrawal should be allowed at all banks and ATMs using the UPI platform. "Cardless cash withdrawal through ATMs is a permitted mode of transaction offered by a few banks in the country on an on-us basis (for their customers at their ATMs)," RBI governor Shaktikanta Das said in his MPC policy statement.

The main idea behind allowing cardless transactions is to help curb incidents of fraud associated with card use at ATMs. "The absence of need for a card to initiate cash withdrawal transactions would help in containing frauds like skimming, card cloning, device tampering, etc," the RBI governor said.

The central bank has said it'll soon issue separate instructions to all ATM networks and banks to initiate this facility. "To encourage card-less cash withdrawal facility across all banks and all ATM networks or operators, it is proposed to enable customer authorisation through the use of UPI (Unified Payments Interface), while settlement of such transactions would happen through the ATM networks. Separate instructions would be issued to NPCI, ATM networks and banks shortly," said the RBI governor.

The US-based NCR Corporation was the first one to launch an interoperable cardless cash-withdrawal solution on the UPI platform. With the cardless feature, one can withdraw cash using a mobile phone and UPI-enabled apps such as Paytm, Google Pay, PhonePe, and BHIM. You don't need to carry a debit or credit card to the ATM. The money can be withdrawn by scanning a QR code on the computer screen from your mobile phone.

Some banks including HDFC Bank are already offering this facility for their customers at the bank's ATMs only. The facility will now be available for customers of all banks at any ATMs.

If you want to use the cardless cash withdrawal facility, the amount to be deducted should be between ₹100-₹10,000 per day. For the entire month, the limit has been set at ₹25,000. However, once these guidelines are implemented at the pan-banking industry level, the RBI could enhance the daily cash withdrawal limit. With this facility, you'll also be able to send money to anyone with a valid bank account without using a debit card.

Meanwhile, in other decisions about payment and settlement systems, the RBI has proposed to align the net worth requirement of non-bank Bharat Bill Payment Operating Units, with that of other non–bank participants who handle customer funds (like payment aggregators), to ₹25 crore.

The central bank said it has prescribed the necessary security controls for digital payment products and services offered by banks and credit card issuing NBFCs. Now, it has proposed to issue similar directions for payment system operators.

As per the RBI, this will allow “robust governance mechanism for identification, assessment, monitoring and management of cybersecurity risks, including information security risks and vulnerabilities, and specify baseline security measures for ensuring safe and secure digital payment transactions”. The directions in this regard will be issued shortly, the central bank said.

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