UPI-Based Cash Withdrawals to Expand Through Business Correspondents

The National Payments Corporation of India (NPCI) is planning to extend Unified Payments Interface (UPI)-based cardless cash withdrawals beyond ATMs and limited merchant outlets. This initiative aims to make cash access more convenient and accessible, particularly in underbanked and rural areas.

Business Correspondent (BC)

• A Business Correspondent (BC) is an individual or entity engaged by banks to provide basic banking services in areas where bank branches are not easily accessible.
• BCs act as the bank’s agents, bridging the gap between banks and customers, particularly in rural and semi-urban areas.

Key Highlights:

• Expansion Scope:
  • Currently, UPI-driven cash withdrawals are available only at UPI-enabled ATMs and certain merchants (₹1,000 per transaction in urban areas; ₹2,000 in rural areas).
  • Plans are underway to extend the facility to over 2 million Business Correspondents (BCs) across India.
• Mechanism:
  • Users can scan a QR code at BC outlets with any UPI app to withdraw cash.
  • The user’s account is debited and the BC’s account credited in real-time.
  • This complements existing modes like biometric Aadhaar-enabled cash withdrawals and micro-ATMs.
  • Proposed withdrawals via UPI at BCs could allow up to ₹10,000 per transaction, similar to micro-ATM limits.