What changed
Previously, prepaid payment instruments were issued only to individuals or specific categories. This circular expands the scope to allow banks to issue such instruments to listed corporates for onward distribution to their employees. Key conditions include a Rs 50,000 per-card limit, loading only from the corporate's bank account with the issuing bank, and mandatory employee identity verification by the corporate.
What it means for you
Banks can now offer a new employee benefit product—corporate prepaid cards—which can drive fee income and deepen corporate relationships. However, banks must implement robust systems to capture employee details and ensure compliance with KYC norms, as they remain responsible for customer service. The Rs 50,000 cap limits the product's use for high-value expenses but makes it suitable for petty cash or travel allowances.
What you must do
- Update your product policy to include corporate prepaid card issuance for listed companies.
- Set up systems to capture and maintain employee details, including photo and ID proof, as provided by the corporate.
- Ensure loading and reloading of cards is done only by debiting the corporate's KYC-compliant account with your bank.
- Train staff on verifying authorized signatories from the corporate's board-approved list.
- Prepare to facilitate fund transfers from these cards to employees' regular bank accounts upon request.
Who it affects
Banks issuing prepaid payment instruments, Listed corporate entities, Employees of listed corporates, System providers and participants in payment systems
What is the maximum amount that can be loaded on a corporate prepaid card?
The maximum value outstanding on any individual prepaid payment instrument at any point of time shall not exceed Rs 50,000.
Who is responsible for verifying the identity of employees receiving these cards?
The corporate entity is responsible for verifying the identity of its employees. However, the bank must maintain records of employee details, including photo and ID proof.
Can the funds from these prepaid cards be transferred to the employee's bank account?
Yes, banks are required to facilitate transfer of funds from such prepaid payment instruments to a regular bank account of the concerned employee, if requested.