RBI Revises Categories of Prepaid Payment Cards

The Reserve Bank of India (RBI) rationalised the categories and limit of prepaid cards to three categories from the earlier five categories.

The prepaid cards also known as semi-closed pre-paid or pre-paid debit cards are convenient alternatives to cash and cheques. These are issued by banks and Non-Banking Financial Companies (NBFCs) on payment of specified amount. These can be used for purchasing goods and services, gifting, small ticket transactions etc.

As per RBI’s revised guidelines, the first category of cards will have a cash limit of Rs 10,000 and the re-load would not exceed the accepted limit during the month. Secondly, for issuing cards of value of Rs 10,001 to Rs 50,000, customer must provide valid documents and these cards should be non-re-loadable in nature. Thirdly, for issuing cards up to value of Rs 50,000, customer must provide full KYC details and these can be re-loadable in nature. All the three types of cards can be issued only in electronic form.

Non-banking entities must maintain the outstanding balance in an escrow account with any commercial bank. The account should be credited when an issuer sells such card to the end-user.