MUMBAI: People without a bank account in India would soon be able to withdraw cash from an automated teller machine (ATM) with the use of mobile technology, Reserve Bank of India Governor Raghuram Rajan announced here Wednesday.
At present, only bank account holders can withdraw cash from an ATM.
“We have recently approved the in-principle setting up of a payment system which will facilitate the funds transfer from bank account holders to those without accounts through ATMs,” Rajan said while speaking at the NASSCOM India Leadership Forum on financial inclusion and technology.
“Essentially, the sender can have the money withdrawn from his account through an ATM transaction. The intermediary processes the payment, and sends a code to the recipient on his mobile that allows him to withdraw the money from any nearby bank’s ATM. The system will take care of necessary safeguards of customer identification, transaction validation, velocity checks etc.,” Rajan said.
“We need more such innovative products,” he added. The RBI governor said cashing out is important for remittances, because the country has a large recipient population, most of whom do not have access to formal banking services.