RBI bans forex-denominated charges on prepaid travel cards
Current · Source: Reserve Bank of India · RBI/2023-24/29 · issued 09 May 2023 · ~2 min read
Quick answerRBI has directed that all fees/charges payable in India on forex prepaid cards, store value cards, and travel cards must be denominated and settled in Rupees only, not in foreign currency.
The rule, in the simplest words
Banks and forex dealers can't charge customers in foreign currency for fees on forex prepaid/travel cards.
All domestic charges on forex prepaid/travel cards must be in Indian Rupees (INR).
This change ensures transparency and avoids hidden foreign exchange markups for customers.
How it plays out — a real example
A forex & trade-finance officer in Indore, Mr. Kumar, is updating the fee schedule for their forex prepaid cards. He ensures that all domestic charges, such as issuance and maintenance fees, are denominated in INR, as per the RBI's new directive. This change will help their customers avoid hidden foreign exchange markups and ensure transparency in their transactions.
What changed
RBI observed some Authorised Persons were levying fees/charges on forex prepaid cards, store value cards, and travel cards in foreign currency. The circular clarifies that any such charges payable in India must be denominated and settled in Rupees only.
What it means for you
Banks and authorised dealers can no longer charge customers in foreign currency for fees like issuance, reload, or maintenance on forex prepaid/travel cards. All such domestic charges must be in INR, ensuring transparency and avoiding hidden forex markups for customers. This may impact fee income for some lenders but aligns with FEMA provisions.
What you must do
Review all fee schedules for forex prepaid cards, store value cards, and travel cards to ensure charges payable in India are in Rupees.
Update system configurations and product documentation to reflect INR-only pricing for domestic fees.
Communicate the change to relevant business and compliance teams, and ensure customer-facing materials are corrected.
Monitor any existing foreign currency fee arrangements and transition them to Rupee denomination immediately.
Who it affects
Authorised Dealers (banks and forex dealers), Customers using forex prepaid cards, store value cards, or travel cards, Compliance and product teams handling forex instruments
❓ Common questions
Does this circular apply to fees charged abroad on these cards?
No, the circular only applies to fees/charges payable in India. Charges incurred outside India are not covered by this instruction.
What happens if we continue charging in foreign currency?
Continuing to charge in foreign currency would violate FEMA provisions under sections 10(4) and 11(1) of FEMA, 1999, and may invite regulatory action.
Are there any exemptions for specific types of cards?
The circular does not mention any exemptions. It applies to all forex prepaid cards, store value cards, travel cards, and similar instruments.
📜 Read the original circular — full text as issued by RBI
RBI/2023-24/29
A.P. (DIR Series) Circular No. 04
May 09, 2023
To
All Authorised Persons
Madam / Sir
Levy of charges on forex prepaid cards/store value cards/travel cards, etc.
Attention of Authorised Dealers is invited to relevant instructions contained in A.P. (DIR Series) Circular No. 46 dated June 14, 2005 and A.P. (DIR Series) Circular No. 102 dated April 02, 2012 , regarding use of International Debit Cards/Store Value Cards/Charge Cards/Smart Cards or any other instrument that can be used to create a financial liability, as 'currency'.
2. A few Authroised Persons are levying certain fees/charges, which are payable in India on such instruments, in foreign currency. It is advised that fees/charges payable in India have to be denominated and settled in Rupees only.
3. The directions contained in this circular have been issued under sections 10 (4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.
Yours faithfully,
(Sibi Mathews)
General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2023-24/29 · issued 09 May 2023. The plain-English explanation above is BankPulse’s own independent summary.
Communicate the change to relevant business and compliance teams, and ensure customer-facing materials are corrected.
💻 IT / Systems
Update system configurations and product documentation to reflect INR-only pricing for domestic fees.
📜 Compliance
Review all fee schedules for forex prepaid cards, store value cards, and travel cards to ensure charges payable in India are in Rupees.
Monitor any existing foreign currency fee arrangements and transition them to Rupee denomination immediately.
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 (Authorised Dealers (banks and forex dealers), Customers using forex prepaid cards, store value cards, or travel cards, Compliance and product teams handling forex instruments), your first concrete step on “RBI bans forex-denominated charges on prepaid travel cards” is: “Review all fee schedules for forex prepaid cards, store value cards, and travel cards to ensure charges payable in India are in Rupees.” (RBI issued this 09 May 2023).
Action required: Review all fee schedules for forex prepaid cards, store value cards, and travel cards to ensure charges payable in India are in Rupees.
Action required: Update system configurations and product documentation to reflect INR-only pricing for domestic fees.
Action required: Communicate the change to relevant business and compliance teams, and ensure customer-facing materials are corrected.
Action required: Monitor any existing foreign currency fee arrangements and transition them to Rupee denomination immediately.
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=12502&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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