RBI TO ALLOW PRE- PAID INSTRUMENTS UP TO MAXIMUM VALUE OF RS. 50,000
Prepaid payment instruments are payment instruments that facilitate purchase of goods and services against the value stored on such instruments. The Reserve Bank of India, in its draft guidelines on the
issuance and operations of prepaid instruments in India, said it will allow banks and non-bank finance companies to issue all categories of prepaid payment instruments, reloadable or non-reloadable, up to a maximum value of Rs. 50,000 and minimum validity period of six months. Subject to meeting the
eligibility criteria, only those banks and NBFCs complying with the prescribed capital adequacy requirement would be permitted to issue prepaid payment instruments. Other issuers should have minimum net owned funds of Rs. 10 lakh to be eligible to issue the prepaid payment instruments. RBI has stipulated that only those banks which have been permitted to provide mobile banking transactions would be allowed to launch mobile based prepaid payment instruments such as mobile
wallets and mobile accounts. The issuers should also comply with the Know Your Customer/Anti-Money Laundering/Combating Financing of Terrorism guidelines issued by the Reserve Bank of India to banks and the necessary systems should be put in place to ensure compliance. However, in cases where payment instruments, which are redeemable at a group of clearly identified merchant
locations / establishments and are below Rs. 1,000 in value, the card could be issued without KYC.Those entities issuing instruments for use at their respective establishment only are exempted from the purview of the guidelines and need not seek authorization from Reserve Bank. However, the entities can issue instruments for a maximum value of Rs. 5,000 and the same cannot be used for purchase of another prepaid payment instrument.
issuance and operations of prepaid instruments in India, said it will allow banks and non-bank finance companies to issue all categories of prepaid payment instruments, reloadable or non-reloadable, up to a maximum value of Rs. 50,000 and minimum validity period of six months. Subject to meeting the
eligibility criteria, only those banks and NBFCs complying with the prescribed capital adequacy requirement would be permitted to issue prepaid payment instruments. Other issuers should have minimum net owned funds of Rs. 10 lakh to be eligible to issue the prepaid payment instruments. RBI has stipulated that only those banks which have been permitted to provide mobile banking transactions would be allowed to launch mobile based prepaid payment instruments such as mobile
wallets and mobile accounts. The issuers should also comply with the Know Your Customer/Anti-Money Laundering/Combating Financing of Terrorism guidelines issued by the Reserve Bank of India to banks and the necessary systems should be put in place to ensure compliance. However, in cases where payment instruments, which are redeemable at a group of clearly identified merchant
locations / establishments and are below Rs. 1,000 in value, the card could be issued without KYC.Those entities issuing instruments for use at their respective establishment only are exempted from the purview of the guidelines and need not seek authorization from Reserve Bank. However, the entities can issue instruments for a maximum value of Rs. 5,000 and the same cannot be used for purchase of another prepaid payment instrument.
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