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In a bid to boost the growth of the industry, the Reserve Bank of India (RBI) has relaxed the norms for prepaid instruments (PPIs).
A few days after issuing the final guidelines for niche banks, RBI has now allowed PPIs to issue cards with balance of up to Rs 1 lakh. Earlier, the limit was Rs 50,000.
"It has been considered necessary to amend certain provisions of the existing guidelines and issue additional guidelines for ensuring growth of the prepaid payment industry," RBI said in a notification.
In a bid to boost the growth of the prepaid payment industry, RBI has also introduced a new category of open system PPIs. With this, a card can now be issued to the dependant or family member only if the account is fully Know Your Customer compliant (KYC). And only one card per beneficiary can be introduced.
For such PPIs, the maximum cash out allowed per month is Rs 25,000 and Rs 10,000 per transaction.
Now, banks can also issue rupee denominated cards to foreign travelers and to NRIs. by overseas branches of banks in India directly or by cobranding with the exchange houses/money transmitters.
The maximum amount to be loaded on these cards is Rs 2 lakhs but the cash withdrawal from these cards is restricted to Rs 50,000 every month. There are certain other conditions that have to be met with these instruments such as the cards can be issued by overseas branches of banks in India directly or by co-branding with the exchange houses/money transmitters and the can be issued only when the traveller arrives in India.
Apart from this RBI has also increased the validity of gift cards from one year to three years.
