The Reserve Bank of India has asked banks to allow cardless withdrawal of cash from ATMs in order to curb fraud. In a May 19 notification, the RBI wrote 'all banks, ATM networks, and WLAOs (white label ATM operators) may provide the option of ICCW (inter-operable card-less cash withdrawal) at their ATMs'. It further said NPCI (National Payments Corporation of India) had been advised to facilitate Unified Payments Interface (UPI) integration with all banks and ATM networks.

At present, cardless cash withdrawal through ATMs is only offered by a few banks for customers at ATMs operated by themselves (also known as an on-us basis).

What is cardless cash withdrawal?

Simply put cardless cash withdrawals allow customers to take money without inserting their debit or ATM cards. Usually the system works with a set of OTPs and access is initiated via the bank's app.

The RBI believes this will help prevent frauds like

skimming, card cloning and device tampering, among others. In order to encourage this form of withdrawal at all ATMs, the RBI has proposed to enable customer authorisation through the use of UPI.

How does the card-less cash withdrawal work?

While UPI will be used for customer authorisation for cardless transactions, the settlement would be through the National Financial Switch (NFS) or the ATM networks, as per the RBI notification.

The RBI also said on-us/off-us ICCW transactions shall be processed without levy of any charges - other than those prescribed under the circular on Interchange Fee and Customer Charges.

The withdrawal limits for ICCW transactions will be in-line with limits for regular ATM withdrawals.

The RBI also said that all other instructions related to Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions shall continue to be applicable.
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