RBI allows bulk issue of prepaid cards
MUMBAI: Banks and other issuers of prepaid instruments have been allowed to issue such cards in bulk to corporates and other employers to replace cash salaries with electronic payments. Prepaid cards are aimed at helping those employers who have a large number of workers without bank accounts. They can be used just like plastic cards.
The RBI has said that the relaxation has been provided to “facilitate greater adoption of digital payments”. Until now, such bulk cards could be issued to only listed corporates. Under the relaxed norms, the central bank has allowed unlisted corporates, partnership firms, sole proprietorship, public organisations like municipal corporations, and urban local bodies to buy these cards in bulk for onward issue to their staff.
“Banks shall extend this facility only to those employers that have a bank account with them and after obtaining an undertaking that they are not availing of this facility from any other bank,” the RBI said in a circular on Tuesday.
While the bank will issue blank cards, verification of the identity of the staff/employees or contract workers will be the responsibility of the ’employer’, the RBI said. “The bank should put in place proper systems to capture and maintain details of the employees to whom the cards are issued by the ’employer’ along with copies of photograph and identity proof of such employees,” said the RBI.