RBI Permits Cash Withdrawal at POS Terminals (2009)
Current · Source: Reserve Bank of India · RBI/2009-10/105 · issued 31 May 2009 · ~1 min read
Quick answerRBI allowed cash withdrawals up to Rs 1,000/day at POS terminals using Indian debit cards, expanding cash access beyond ATMs. Banks must board-approve, set up redressal, and get RBI permission.
The rule, in the simplest words
You can take out up to Rs 1,000 per day in cash at a shop's payment machine (POS terminal) using your Indian debit card.
You can get cash even if you don't buy anything at the shop.
Banks must check the shop carefully before allowing cash withdrawals there.
Banks must set up a way for customers to complain, and those complaints can go to the Banking Ombudsman (a special officer who solves bank problems).
Banks need permission from their board of directors and from the RBI (Reserve Bank of India) to offer this service.
How it plays out — a real example
A branch operations officer in Indore, Priya, sees a long line at her bank's only ATM. She tells customers they can now withdraw up to Rs 1,000 per day at a nearby grocery store using their debit card, even without buying anything. This saves them a trip and makes the bank look helpful.
What changed
Previously, cash withdrawal using plastic cards was limited to ATMs. RBI now permitted debit card holders to withdraw up to Rs 1,000 per day at merchant establishments designated by banks, with or without a purchase.
What it means for you
Banks can offer a new customer convenience feature, potentially increasing debit card usage and merchant footfall. However, they must conduct due diligence on merchants, implement customer redressal mechanisms, and obtain board approval plus RBI permission under the Banking Regulation Act.
What you must do
Get board approval for the cash-at-POS product, including risk assessment and mitigation measures.
Designate merchant establishments after due diligence for offering this facility.
Set up a proper customer complaint redressal mechanism, covered under the Banking Ombudsman Scheme.
Obtain one-time RBI permission under Section 23 of the Banking Regulation Act, 1949, enclosing board note/approval.
Who it affects
All scheduled commercial banks issuing debit cards, System providers (Visa, MasterCard, American Express), Merchant establishments designated by banks, Debit card holders in India
❓ Common questions
What is the maximum cash withdrawal limit per day at POS?
The limit is Rs 1,000 per day per card, as per the circular.
Is a purchase mandatory to withdraw cash at POS?
No, the facility is available irrespective of whether the cardholder makes a purchase or not.
What regulatory approvals are needed for banks?
Banks need board approval and one-time permission from RBI's Department of Banking Operations and Development under Section 23 of the Banking Regulation Act, 1949.
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/105
DPSS.CO.PD.No. 147/02.14.003/ 2009-10
22nd July 2009
To
All System Providers (VISA / MasterCard / American Express),
All Scheduled Commercial banks
Dear Sir,
Cash Withdrawal at Point-of-Sale (POS)
Presently cash withdrawal facility using plastic cards is available only at Automatic Teller Machines (ATMs). As on May 31, 2009, number of ATMs and POS terminals in the country stood at 44,857 and 4,70,237 respectively. The use of debit cards at Point-of-Sale (POS) terminals at different merchant establishments has been steadily increasing. As a further step towards enhancing the customer convenience in using the plastic money, it has been decided to permit cash withdrawals at POS terminals. To start with, this facility will be available for all debit cards issued in India, upto Rs.1000/- per day.
2. The conditions subject to which this facility is being extended is given in the Annex .
3. Banks may obtain the approval of their Board of Directors for offering this facility. The note put up to the Board should incorporate the product profile, risk perceived by the bank and the risk mitigation measures.
4. This circular is being issued in exercise of the powers conferred on the Reserve Bank under Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
Yours faithfully
(G.Padmanabhan)
Chief General Manager
Encl: as above
Annex
Conditions for 'cash withdrawal at Point of Sale (POS)
1. This facility is available only against debit cards issued in India.
2. The maximum amount that can be withdrawn at POS terminals is fixed at Rs.1000/- per day.
3. This facility may be made available at any merchant establishment designated by the bank after a process of due diligence.
4. The facility is available irrespective of whether the card holder makes a purchase or not.
5. In case the facility is being availed along with the purchase of merchandise, the receipt generated shall separately indicate the amount of cash withdrawn.
6. Banks offering this facility shall put in place a proper customer redressal mechanism. Complaints in this regard will fall within the ambit of the Banking Ombudsman Scheme.
7. Banks offering this facility shall on approval by their respective Boards obtain one time permission of Reserve Bank of India, Department of Banking Operations and Development under Section 23 of the Banking Regulation Act, 1949. (A copy of the Board note / approval may be enclosed.)
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/105 · issued 31 May 2009. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All scheduled commercial banks issuing debit cards, System providers (Visa, MasterCard, American Express), Merchant establishments designated by banks, Debit card holders in India), your first concrete step on “RBI Permits Cash Withdrawal at POS Terminals (2009)” is: “Get board approval for the cash-at-POS product, including risk assessment and mitigation measures.” (RBI issued this 31 May 2009).
Action required: Get board approval for the cash-at-POS product, including risk assessment and mitigation measures.
Action required: Designate merchant establishments after due diligence for offering this facility.
Action required: Set up a proper customer complaint redressal mechanism, covered under the Banking Ombudsman Scheme.
Action required: Obtain one-time RBI permission under Section 23 of the Banking Regulation Act, 1949, enclosing board note/approval.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5184&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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