GS Paper - 3 (Economy)

The Reserve Bank of India (RBI) has proposed to make cardless cash withdrawal facility available at all ATMs, irrespective of banks, through the Unified Payment Interface (UPI), one of the key decisions made by the RBI’s Monetary Policy Committee (MPC). At present the facility of cardless cash withdrawal through ATMs is limited only to a few banks.

How will it work?

  1. ATMs soon will show an option to withdraw cash using UPI. Upon selecting that option, a user would have to add the amount they wish to withdraw following which a QR code would be generated on the ATM machine.
  2. The user would then have to scan that code on their UPI app and enter their pin following which the ATM will dispense cash.
  3. Allowing cash withdrawals through UPI would increase the security of such transactions.
  4. In addition to enhancing ease of transactions, the absence of the need for physical cards for such transactions would help prevent frauds such as card skimming and card cloning, among others, the RBI said.
  5. Debit cards are currently the most popular way of cash withdrawals at ATMs.
  6. As of now, there are more than 900 million debit cards in the country, and experts have cautioned that allowing cash withdrawals through UPI could negatively impact debit card usage.


  1. UPI would be processing a billion transactions a day, and to enable that, a number of initiatives have been introduced.
  2. Chief among these is UPI’s AutoPay feature, which has already seen increased adoption owing to RBI’s disruptive guidelines on recurring mandates.
  3. The RBI has also announced UPI on feature phones without an Internet connection, which is expected to open up the payments system to more than 40 crore individuals who use such devices.
  4. This will expand digital financial inclusion and add to the number of transactions made on the platform.