RBI allows banks to issue prepaid cards to corporates for employees
Current · Source: Reserve Bank of India · RBI/2011-12/144 · issued 04 Aug 2011 · ~2 min read
Quick answerRBI now permits banks to issue prepaid payment instruments to listed corporates for employee use, with a Rs 50,000 cap per card. Banks must verify employee identity via the corporate and load funds only from the corporate's KYC-compliant account with the same bank.
The rule, in the simplest words
Banks can now give prepaid cards (like a gift card you can spend) to big companies (listed on a stock exchange) for their workers.
Each worker's card can only have up to Rs 50,000 on it at any time.
The company must check who the worker is (like their photo and ID), and the bank must keep a copy of that info.
Money can only be put on the card from the company's bank account at the same bank, and that account must have full KYC (know-your-customer checks done).
If a worker asks, the bank must help move money from the prepaid card into the worker's regular bank account.
How it plays out — a real example
A KYC & compliance officer in Indore, Priya, is setting up a new product for a listed corporate client. She explains to the company's HR head that each employee can get a prepaid card with a Rs 50,000 limit, loaded only from the company's KYC-compliant account at her bank. Priya collects the employee ID proofs from the corporate and stores them in her system, ensuring she can later transfer leftover funds to an employee's personal bank account if requested.
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
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
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.
📜 This document’s life story (2 recorded events, each backed by RBI’s own words)
RBI’s words: “A reference is invited to our circulars ... RBI/2011-12/144 ... dated August 04, 2011”
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/144
DPSS.CO.PD.No. 225/02.14.006/2011-12
August 04, 2011
To
All System Providers, System Participants
and all other prospective prepaid payment instrument issuers
Dear Sir,
Policy Guidelines for issuance and operation of Prepaid Payment Instruments in India.
A reference is invited to our circular RBI/2010-11/261DPSS.CO.No. 1041/02.14.006/2010-2011 dated November 04, 2010 , containing the guidelines for enabling additional category of prepaid payment instruments that could be issued by banks/NBFCs and non-banks.
2. It is advised that it has been decided to permit banks to issue prepaid payment instruments to corporates for onward issuance to their employees, subject to the following conditions:-
Prepaid payment instruments can be issued only to corporate entities listed in any of the stock exchanges in India;
Verification of the identity of the employee shall be the responsibility of the concerned corporate. The bank should put in place proper systems to capture and maintain details of the employees to whom the cards are issued by the corporate along with copies of photograph and identity proof of such employees. The corporate is also required to make available details of bank accounts (if any) of the employees to the bank;
Banks may ensure that the list of authorized signatories approved by the Board of the corporate entity is taken on record and requests from such authorized persons are only accepted for the purpose of loading/activating the prepaid payment instruments;
These prepaid payment instruments shall be loaded only by debit to the bank account, which are subject to full KYC, maintained by the corporate with the same bank. Reloading of these instruments shall also be carried out only by debit to this account;
The maximum value outstanding on individual prepaid payment instruments at any point of time shall not exceed Rs 50,000/-;
Banks shall facilitate transfer of funds from such prepaid payment instruments to a regular bank account of the concerned employee, if requested for;
The banks shall be responsible for all customer service aspects related to these instruments;
3. This directive is issued under section 18, of the Payment and Settlement Systems Act 2007, (Act 51 of 2007).
4. Please acknowledge receipt.
Yours faithfully
Vijay Chugh
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/144 · issued 04 Aug 2011. The plain-English explanation above is BankPulse’s own independent summary.
Set up systems to capture and maintain employee details, including photo and ID proof, as provided by the corporate.
📜 Compliance
Update your product policy to include corporate prepaid card issuance for listed companies.
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.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (Banks issuing prepaid payment instruments, Listed corporate entities, Employees of listed corporates, System providers and participants in payment systems), your first concrete step on “RBI allows banks to issue prepaid cards to corporates for employees” is: “Update your product policy to include corporate prepaid card issuance for listed companies.” (RBI issued this 04 Aug 2011).
Circular: RBI/2011-12/144 -- RBI allows banks to issue prepaid cards to corporates for employees
Issued: 04 Aug 2011
Action required: Update your product policy to include corporate prepaid card issuance for listed companies.
Action required: Set up systems to capture and maintain employee details, including photo and ID proof, as provided by the corporate.
Action required: Ensure loading and reloading of cards is done only by debiting the corporate's KYC-compliant account with your bank.
Action required: Train staff on verifying authorized signatories from the corporate's board-approved list.
Action required: Prepare to facilitate fund transfers from these cards to employees' regular bank accounts upon request.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6656&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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