The Hindu Business Line : RBI to regulate issue of ‘pre-paid’ payment cards

Mumbai, Nov. 6 The Reserve Bank of India proposes to regulate ‘pre-paid’ payment cards and will shortly come out with an approach paper on the same, said Mr G. Gopalakrishna, Executive Director, Reserve Bank of India.

Prepaid cards are multipurpose payment cards that can be obtained by paying cash upfront. These cards can be used to make bill payments such as telephone bills or to make purchases at shops. These cards can only be used at point-of-sale terminals and for making payments but not for withdrawing cash.

Some of the banks that issue prepaid cards are ICICI Bank, HDFC Bank, Kotak Mahindra Bank and Axis Bank.

Speaking on the sidelines of a FICCI-IBA conference on ‘Global Banking: Paradigm Shift’, he said the RBI wants to regulate the issue of such cards which are a part of the payment system. After the guidelines are issued, they would be applicable to the existing prepaid card issuers as well as new entrants, Mr Gopalakrishna said. Therefore, both new and existing players would need to seek the RBI’s permission. Since the prepaid cards were a means of storing money they had to be regulated, he said.

Earlier in his speech, he highlighted the measures taken by the RBI to make the payment and settlement system more efficient.

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