RBI may permit cash withdrawals from PoS terminals

The Reserve Bank of India (RBI) is likely to give the go ahead for withdrawals from the point of sale (PoS) terminals using prepaid cards issued by banks.

According to a senior executive of a public sector bank, the central banks was allowing open loop cards to withdraw money from a PoS terminal. He added that RBI was working on issues, like the amount a PoS owner should charge. He said the decision may come soon.

There are three types of prepaid cards - prepaid cards issued by banks that are generally open loop cards, cards issued by non-banking finance companies (NBFCs) that are semi-closed loop cards, like telecom companies issuing prepaid vouchers, and closed loop cards issued by different firms like gift vouchers. Last year, RBI had included closed and semi-closed loop cards under the Payments and Settlement Act.

India has 4.7 million PoS terminals.

ICICI Bank had recently tied-up with First Data to set up PoS terminals.

PoS terminals are predominantly used for sale and purchase transactions, while an ATM can be used for several other services, for instance balance enquiry.