Withdrawing Cash from Shops instead of ATMs

The Reserve Bank of India has recently made public its intent to enable customers who have a Debit Card to withdraw cash from merchant outlets / shopping outlets.

What this means for customers is the following

(1) In addition to ATMs customers can now go to merchants who have Credit / Debit Card swipe machines and withdraw money similar to the manner in which they do so in an ATM
(2) This will result in added convenience as now customers do not need to go hunting for an ATM, they can shop as well as withdraw money at the same merchant outlet itself

However the RBI has not made the fine print of execution clear and several key questions have been left unanswered, which can drastically alter the manner in which banks in India do Business

(1) Can money be withdrawn against Credit Cards or Debit Cards? If RBI permits to withdraw money against Credit Cards, then it will be tantamount to killing the Credit Cards proposition as it will be free money on Credit. My guess is that RBI will restrict the withdrawals to Credit Cards only
(2) Most Master and VISA Debit Cards when used for shopping at Merchant outlets do not require a PIN to be entered for executing the transactions. Will RBI be allowing Cash Withdrawal as well without a PIN validation? This will create a direct security validation conflict across channels and will put a question mark over PIN Based transactions as a whole
(3) Will all Debit Card Merchants be expected to participate in this scheme and what is the level of cash they need to maintain etc. and the guildelines around the same are yet to be examined

Every step taken should address a need. When RBI made withdrawal of cash from all ATMs free of cost, then there was a genuine customer need for the same, however in this case it is unclear why RBI has taken such a far reaching decision without giving due thought to the operational aspects of the same.

While the Indian consumer is fairly smart, we should not come up with convoluted banking guidelines (like the ones on Income Tax) which the customer fails to understand and use to his benefit.

While this will definitely be a customer enabling step, there are several key decisions that RBI will need to take while setting out an execution plan for the same. I am awaiting clarity in this regard before I comment further.
For any questions or queries on Personal Banking practises feel free to write to Ask.Pranav@Gmail.Com