RBI eases co-branded prepaid card rules for banks

What changed

Previously, all entities including banks needed one-time RBI approval to issue co-branded prepaid instruments. Now, banks have been given general permission to issue rupee-denominated co-branded prepaid cards, subject to conditions in a December 2012 circular. NBFCs and other non-bank entities must still seek one-time approval.

What it means for you

Banks can now launch co-branded prepaid cards faster without waiting for individual RBI nods, reducing time-to-market. This levels the playing field slightly in favor of banks over NBFCs in the prepaid space. Lenders should review the December 2012 circular conditions to ensure compliance before issuing such instruments.

What banks were required to do at the time

• Review the conditions in RBI circular DBOD.No.FSD.BC.67/24.01.019/2012-13 dated December 12, 2012 for issuing co-branded prepaid cards.
• Ensure the issuer's name is prominently visible on the prepaid instrument as per guidelines.
• If you are a bank, leverage the general permission to fast-track co-branded prepaid product launches.
• If you are an NBFC, continue to apply for one-time RBI approval before issuing co-branded prepaid instruments.

Who it affects

All scheduled commercial banks, NBFCs issuing prepaid payment instruments, Other non-bank prepaid payment instrument issuers, System providers and participants in prepaid payment systems