BackDYK: You may be able to shop with your metro prepaid cards
RBI has issued draft guidelines on prepaid payment instruments for mass transit systems
Premium
The Reserve Bank of India (RBI), on 28 May, issued draft guidelines on prepaid payment instruments for mass transit systems such as metro trains and road transport services. Once finalised and implemented, these rules will apply to prepaid cards that can be preloaded and used for travel, for example, by metro commuters in Delhi and Mumbai. These prepaid cards can soon be used to shop as well.
RBI’S PROPOSAL
The central bank is proposing to introduce a new category of semi-closed prepaid payment instruments. According to the draft guidelines, the cards will be issued by mass transit system operators such as metro, bus or taxi service providers, and can be used for transportation within these systems. These prepaid cards already exist in the market, but till now there weren’t any guidelines for such instruments. According to the draft, these can be reloaded up to 2,000. No cash-out or refund will be permitted. Funds transfer is also not allowed. These cards will have a minimum validity of six months from the date of issue. The issuer of the card can ask the user to go through a know-your-customer (KYC) process.
You will be able to use these cards at merchant outlets within the premises of the transit system; in the existing systems, this is not possible.
Since it will be regulated, the money will have to go to an escrow account, and the transit operator that issues the prepaid cards will have to identify the money as deposits. Currently, the money that you load goes to the current account of the transit system operator.
These guidelines will come into effect from the date the circular is issued. The draft guidelines are available at https://mintne.ws/1FOlhBl and you can give your feedback latest by 15 June at ppimts@rbi.org.in.
EXISTING SCENARIO
As of now, to a certain extent, metro smart cards function in a way that’s similar to the payment instrument that RBI proposes to launch. However, metro smart cards in Delhi, for example, have an upper limit of 3,000 and validity period of 10 years. You also get a refund in case you do not want to use the card, for a penalty of 20. A Delhi metro card user can use her card for travel on Delhi Metro, Airport Express Line and the monorail in Gurgaon. And though it is not clear from the draft guidelines, but it is unlikely that these cards can be used in different cities. Once the guidelines come into effect, prepaid payment instruments will be regulated, and existing ones may have to change accordingly.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
