The Reserve Bank of India (RBI) has decided to permit all banks to introduce cardless cash withdrawal through ATMs using the Unified Payments Interface (UPI).

What is Unified Payments Interface (UPI)?

• It is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood. It also caters to the “peer to peer” collect request which can be scheduled and paid as per requirement and convenience. It facilitates immediate money transfer through mobile devices round the clock.

• The National Payments Corporation of India (NPCI) launched UPI in April 2016.

• With the latest RBI announcement, the cardless transaction can now be done at all ATMs using the UPI irrespective of the bank.

• In addition to enhancing ease of transactions, the absence of the need for physical card for such transactions would help prevent frauds such as card skimming, card cloning, etc.

• It is proposed to enable customer authorisation through the use of Unified Payments Interface (UPI) while settlement of such transactions would happen through ATM networks.

• Currently, 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 own ATMs).

• Major lenders like SBI, ICICI Bank and HDFC Bank are offering this facility, especially through their cardless transaction enabled ATMs. To use the facility, a customer has to register on the app or website of the respective bank and initiate a card-less cash withdrawal transaction.

• Following this, the customer gets a PIN which is required to be punched in the system for withdrawal.

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