Home › Circulars › RBI/2013-14/231

Cash Withdrawal at POS Extended to Bank-Issued Prepaid Cards

Current · Source: Reserve Bank of India · RBI/2013-14/231 · issued 05 Sep 2013 · ~1 min read
Quick answerRBI now allows cash withdrawal at POS terminals using bank-issued open system prepaid payment instruments, with a daily limit of Rs. 1,000, same as debit cards. This expands cash access for prepaid cardholders.
The rule, in the simplest words
How it plays out — a real example

A branch operations officer in Indore, Priya, has a customer who uses a bank-issued prepaid card to pay for small purchases. Now, when the customer asks to withdraw Rs. 500 cash at the POS machine in Priya's branch, Priya can process it just like a debit card withdrawal, as long as the daily limit of Rs. 1,000 isn't crossed. She makes sure the POS terminal is set up correctly and reminds the customer that the same rules apply as for debit cards.

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

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)

❓ Common questions

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.

📜 Read the original circular — full text as issued by RBI
RBI/2013-14/231 DPSS.CO.PD.No.563/02.14.003/2013-14 September 5, 2013 The Chairman and Managing Director / Chief Executive Officers All Scheduled Commercial Banks including RRBs / Urban Co-operative Banks / State Co-operative Banks / District Central Co-operative Banks /All Card Network Providers Madam / Dear Sir, Cash withdrawal at Point of Sale (POS) - Prepaid Payment Instruments issued by banks A reference is invited to our circular DPSS.CO.PD.No. 147 /02.14.003/2009-10 dated July 22, 2009 permitting cash withdrawal at Point of Sale (POS) by all debit cards issued in India upto Rs.1000/- per day,  subject to certain conditions. 2. The open system prepaid payment instruments (PPIs) issued by banks is perceived to be a subset of debit cards. Hence, on a review of the position, it has been decided that the facility of cash withdrawal at POS with debit cards may be extended to such open system prepaid payment instruments issued by banks in India. The limit of cash withdrawal will remain Rs.1000/- per day subject to the same conditions as applicable hitherto to debit cards. 3. 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, (Vijay Chugh) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/231 · issued 05 Sep 2013. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Ensure POS terminals are configured to allow cash withdrawal from bank-issued open system prepaid cards.
📜 Compliance
  • 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.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (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)), your first concrete step on “Cash Withdrawal at POS Extended to Bank-Issued Prepaid Cards” is: “Ensure POS terminals are configured to allow cash withdrawal from bank-issued open system prepaid cards.” (RBI issued this 05 Sep 2013).

  1. Circular: RBI/2013-14/231 -- Cash Withdrawal at POS Extended to Bank-Issued Prepaid Cards
  2. Issued: 05 Sep 2013
  3. Action required: Ensure POS terminals are configured to allow cash withdrawal from bank-issued open system prepaid cards.
  4. Action required: Update internal policies and customer communication to reflect the new facility for prepaid cardholders.
  5. Action required: Monitor daily cash withdrawal limits (Rs. 1,000) and ensure same conditions as debit cards apply.
  6. Action required: Train staff and merchant partners on handling cash withdrawal transactions for prepaid instruments.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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.

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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=8382&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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