What changed
Previously, only debit cards could be used for cash withdrawal at POS terminals up to Rs. 1,000 per day. Now, open system prepaid payment instruments issued by banks are also permitted for this facility, under the same conditions and limit.
What it means for you
Banks and card network providers must update their POS systems and processes to support cash withdrawals from bank-issued prepaid cards. This increases utility of prepaid instruments, potentially driving adoption, but also requires compliance with existing debit card conditions for cash withdrawal.
What you must do
- Ensure POS terminals are configured to allow cash withdrawal from bank-issued open system prepaid cards.
- Update internal policies and customer communication to reflect the new facility for prepaid cardholders.
- Monitor daily cash withdrawal limits (Rs. 1,000) and ensure same conditions as debit cards apply.
- Train staff and merchant partners on handling cash withdrawal transactions for prepaid instruments.
Who it affects
All scheduled commercial banks including RRBs, Urban co-operative banks, State co-operative banks, District central co-operative banks, Card network providers, Prepaid payment instrument issuers (banks)
What is the daily cash withdrawal limit for prepaid cards at POS?
The limit is Rs. 1,000 per day, same as for debit cards, subject to the same conditions.
Does this apply to all prepaid payment instruments?
No, only open system prepaid payment instruments issued by banks are covered. Closed system or semi-closed PPIs are not included.
When did this circular become effective?
The circular was issued on September 5, 2013, and is effective from that date.