People may soon be able to withdraw cash from over two million business correspondent (BC) outlets across India using the Unified Payments Interface (UPI), according to reports on Monday. The National Payments Corporation of India (NPCI) is reportedly seeking approval from the Reserve Bank of India (RBI) to expand the facility.
UPI withdrawals are currently only available at select ATMs and merchants. The current transaction limit is ₹1,000 in towns and cities and ₹2,000 in rural areas. The proposed plan allows BCs to disburse up to ₹10,000 per transaction, according to the report.
What is a business correspondent (BC)?
Business correspondents are local agents who offer basic banking services in areas with few branch and ATM locations. BCs can be business owners, non-profit organizations, or individuals.
Customers have already used them to withdraw cash using debit cards or Aadhaar-based biometric authentication. If UPI-based QR codes are implemented, customers will scan the code with any UPI app on their phones, authorise the debit, and collect cash from the bank.
Convenience versus Security
Customers who struggle with fingerprint authentication or are hesitant to use physical debit cards may benefit from the new system. However, concerns have been raised about security. In previous cases, BCs have been caught up in the trail of stolen or laundered funds that were routed through multiple accounts.
Because UPI withdrawals do not require the account holder's physical presence, experts warn that the risk of misuse may increase.
Also Read: New UPI Rules Kick In Today: Transaction Limits Increased
The government targets 1 billion daily UPI transactions
UPI now accounts for approximately 85% of all digital payments in India and nearly 50% of global real-time digital transactions. On August 2, daily transactions reached 707 million, the highest ever recorded. In July, the platform handled 19.5 billion transactions totaling over ₹25 trillion.
The government has set a target of one billion daily transactions, which the NPCI expects to meet next year at the current rate of growth.
The UPI-based cash withdrawal proposal is currently in the planning stage, with the NPCI awaiting the RBI's decision.
