Banks can issue prepaid instruments only to listed cos: RBI

Central bank says the maximum value of an individual prepaid payment instrument should not exceed Rs 50,000

PTI | August 5, 2011



The Reserve Bank on Thursday said prepaid payment instruments like smart cards, magnetic stripe cards, mobile wallets can be issued by banks only to corporates listed in India. In a circular issued to all banks, the Reserve Bank said, "Prepaid payment instruments can be issued only to corporate entities listed in any of the stock exchanges in India".

It further said the corporates would have to verify the identity of the employee to whom the card would be issued, along with copies of photograph and a proof of identity.

"The corporate is also required to make available details of bank accounts of the employee to the bank," the RBI said. The central bank said the maximum value of an individual prepaid payment instrument should not exceed Rs 50,000.

In 2009, the Reserve bank had allowed all banks and non-banking financial institutions (NBFC), meeting the regulatory capital adequacy norms, to issue the instruments which can be used for purchase of goods and services.

Corporates usually avail this facility from the bank for onward issuance to their employees. Pre-paid payment instruments - issued as smart cards, magnetic stripe cards, mobile wallets, paper vouchers, gift cards and travel cards among others - facilitate purchase of goods and services against the value stored in it.

The value stored on the instrument represents the value paid for by the holder of the card. The money in the prepaid instruments would be loaded by debit to the bank account after fulfilling all know your customer (KYC) requirements.

Further, RBI has also asked banks to transfer funds from such prepaid instruments to a regular bank account of the employee if the same has been requested for.

Comments

 

Other News

Distinguishing Fish 1 and Fish 2: The pragmatism behind India’s WTO ratification

 India became the 123rd WTO member to ratify the multilateral Agreement on Fisheries subsidies (AoFS) when it deposited the Instrument of Acceptance for Phase 1 on July 20, 2026. The ratification is restricted to disciplining Illegal, Unreported and Unregulated fishing (IUU), protection for overfished

The 7% growth problem: Why the next 7% will be harder

India has become accustomed to hearing the 7% growth number. It is now less a milestone than an expectation. Yet the paradox is becoming clearer: maintaining 7% growth may be considerably harder than achieving it once. India’s real GDP grew 7.7% in FY2025–26, following growth of 6.5% in FY202

The Constitution cannot be altered: Justice Abhay Oka

Justice Abhay Oka, who retired from the Supreme Court in May 2025, has said that the Constitution of India cannot be altered. Explaining the landmark Kesavananda Bharati judgment (1973) on the basic structure of the Constitution, he said, “This is one judgment that has saved democracy in India.&rdq

How the flora and fauna evolved in the Indian subcontinent

Mammals of India  By A.J.T. Johnsingh and P.O. Nameer HarperCollins India in association with Bombay Natural History Society  

India`s renewable race is moving beyond megawatts

When Shell bought Sprng Energy in 2022, India`s renewable energy market appeared to offer precisely what global energy majors were seeking: scale, growth and a place in one of the world`s largest energy transitions. Four years later, Shell is selling the same business to Aditya Birla Group for an enterpris

Nepal Floods: India keeps close watch on the situation

India`s central government has been keeping a close watch on the situation arising out of the flash flood in Nepal on Wednesday. Union home minister Amit Shah spoke with the chief ministers of Bihar and Uttar Pradesh, the two states that share the border with Nepal, regarding the disaster

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter