by Moiz Mannan
In a move to enlarge the net of financial inclusion as well as make it easier for visiting non-resident Indians and foreigners to deal in India, the central bank has revised its norms with regard to pre-paid instruments (PPIs).
The rationalised measures would be particularly beneficial to NRIs working in the Gulf because a vast majority of them are frequent visitors to India and also have dependents here. Nearly all Indian expats in the GCC countries avail of their annual leave, which they spend with their families back home.
This is also a time when they do a considerable amount of spending. Mostly, it is the immediate family consisting of wife and children and often parents, siblings and other relatives who look forward all year round to this visit. With increasing amounts of disposable income, many visiting expats now go sightseeing or on religious vacations within India during these visits.
For all these activities, the NRIs need a convenient way to do monetary transactions. For this, they would either have to carry considerable amounts of cash, which is risky, or get credit/ debit cards made in the names of their resident relatives, which has its own hassles regarding registration and recharging.
Recently, the Reserve Bank of India (RBI) changed the guidelines related to Pre Paid Instruments (PPIs), providing individuals with an easier mode of dealing with these instruments. PPIs include prepaid cards, mobile wallets, Internet wallets and paper vouchers.
For resident Indians, the apex bank enhanced the maximum balance that can be made available in a PPI from Rs50,000 to Rs100,000. Going further, the RBI allowed the introduction of two new card categories: One, those issued to family members from fully know-your-customer (KYC) compliant bank accounts; and two, cards for visiting NRIs and foreign nationals. For the latter category the maximum money a card can carry has been fixed at Rs 200,000. Both new additions are beneficial for NRIs.
“The cards can be issued by overseas branches of banks in India directly or by co-branding with the exchange houses/money transmitters up to a maximum amount of Rs.200,000 by loading from a KYC-compliant bank account,” media agencies quoted from the RBI statement. “Such PPIs should be activated by the bank only after the traveller arrives in India.
Cash withdrawal from such PPIs will be restricted to Rs.50,000 per month. The cards should be issued strictly for use in India and transactions settled in rupees,” RBI said, adding that one individual can hold only one card at a time and it is non-transferable.
Banks have to maintain a transaction history of the accounts and refund of unutilised amount has to adhere to foreign exchange guidelines.
With the change in norms, a fully KYC-compliant resident of India can now load up to Rs100,000 in a prepaid instrument. Additionally, such customers can transfer funds from their accounts to a prepaid instrument issued to a family member, subject to a limit of Rs10,000 per cash-out and a ceiling of Rs25,000 per month. Banks have also been permitted to issue non-reloadable instruments in electronic form to foreign nationals or NRIs visiting India, which could be co-branded with exchange houses and money transmitters approved by RBI.
The maximum validity of gift cards has also been enhanced from one year to three years. Other provisions of existing PPI guidelines with respect to gift cards will continue to be applicable. RBI also allowed issue of multiple PPIs by banks from fully KYC-compliant bank accounts for dependents or family members.
