Relaxing norms for pre-paid payment instruments (PPI), the Reserve Bank of India on Wednesday doubled the card limit to Rs 1 lakh.
“The limit of PPI… has now been enhanced from Rs 50,000 to Rs 1 lakh. The balance in the PPI should not exceed Rs 1 lakh at any point of time,” the RBI said in a statement.
The move would help in achieving the objective of limiting cash transactions in the system.
Besides, the maximum validity of gift cards has been enhanced from one year to three years, it said, adding that other provisions of PPI guidelines with respect to gift cards will continue to be applicable.
The RBI also allowed issue of multiple PPIs by banks from fully-KYC compliant bank accounts for dependent or family members, it said.
Only one card can be issued to one beneficiary, it said.
“The bank may put in place mechanisms to monitor and report suspicious transactions on these PPIs to Financial Intelligence Unit India (FIU IND),” it added.
Based on a comprehensive internal review and feedback received from entities currently authorised to issue PPIs, it has been considered necessary to amend certain provisions of existing guidelines for ensuring growth of prepaid payment industry, it said.
The apex bank also permitted banks to issue rupee denominated PPIs for visiting foreign nationals and NRIs.
“Banks are permitted to issue open system rupee denominated non-reloadable PPIs to NRIs and foreign nationals visiting India and PPIs co-branded with exchange houses/money transmitters (approved by RBI) to NRIs and foreign nationals visiting India,” it said.
However, this would be subject to certain conditions like 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 2 lakh by loading from a KYC compliant bank account.
Such PPIs should be activated by the bank only after the traveller arrives in India and cash withdrawal will be restricted to Rs 50,000 per month.
The cards should be issued strictly for use in India and transactions settled in Indian rupee, it added.