RBI tightens norms for pre-paid cards
The Reserve Bank of India tightened and streamlined the norms regarding issuance of pre-paid payment instruments and capped their maximum value at Rs. 50,000.
“The developments in the pre-paid payment instrument segment have necessitated a comprehensive review of guidelines issued so far,” RBI said in a statement today, adding that the maximum balance of any such instrument should not exceed Rs 50,000.
To regulate the issue and operation of Pre-paid Payment Instruments, RBI had laid out the guidelines for issuance of prepaid instruments by banks and non-banks entities.
The instructions have been revised from time to time since then. The developments in the pre-paid payment instrument segment had necessitated a comprehensive review of guidelines issued so far. It was also desirable that all instructions on pre-paid payment instruments are made available at one place. Accordingly, the guidelines have been revised and consolidated in consultation with stake holders.
It said the objective is to make all issuers comply with the strict money laundering laws and all the relevant KYC norms. No card can be issued without verifying the KYC of the issued party, it added. The name of the issuer shall be visible prominently on the payment instrument. Banks/NBFCs/other persons desirous of issuing such cobranded prepaid instruments need to seek one-time approval from RBI, it said.
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