Soon you will be able to withdraw up to Rs 1,000 cash in a

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day from merchant outlets using your debit card, like you do from an ATM.

The Reserve Bank of India on Wednesday allowed use of debit cards at point of sale (POS) terminals at merchant establishments to enhance use of plastic money.

The friendly merchant may have bailed you out by giving cash against a debit card charge slip. Such informal arrangements will not be needed when banks follow up on the new RBI guidelines and enter into formal tie-ups with merchant outlets.

Retail chains, hotels and shops hope to cash in on this facility.

Says Lalit Agarwal, MD of V Mart Retail, “An individual who comes to us for cash could be a potential customer, as well. The transaction fees given to us by the banks will be an incentive for the retailers to extend this facility. But, we would wait to see how the RBI move actually pans out”.

The move will allow users more options to withdraw quick funds. At present, debit card withdrawal facility is available only at ATMs.

According to Reserve Bank of India, the number of ATMs in the country stands at 44,857, while there are 4,70,237 POS terminals.

The latest RBI move is in continuation of its efforts to make banking services accessible widely as well as promote plastic money. Already, RBI has made withdrawing cash from ATM of other banks free.

In addition, the annual credit policy for 2009-10 removed the mandatory licence requirement for setting up an ATM.

Bankers termed it a welcome step.

“It is a very major step by the RBI and customers would have many more platforms for withdrawing money. But, we would have to know the nitty-gritty on how it would function,” said L P Agarwal, chief general manager of Punjab National Bank.