Conversely, if the service provider fails to meet the annual distribution target, the bank will impose a penalty equal to 25% of the compensation on a quarterly basis.

“Claw back will also be triggered in the case of applications found fraudulent, and cards were cancelled within 180 days with/without a single transaction,” it said.

Mint's emailed queries to Bank of Baroda remained unanswered.

The UPI challenge

Among banks, NSDL Payments Bank has issued the largest number of prepaid cards, at 38.9 million, followed by HDFC Bank with 17.2 million, according to RBI data.

Experts said that although India’s fast payments platform, Unified Payments Interface (UPI), has struck a blow to other ways of transferring funds and paying for goods and services, there are some use cases for prepaid payment instruments (PPIs).

For the entire industry, the difference in volume between PPIs—an aggregate of cards and wallets—and UPI is enormous. In November, these instruments facilitated 899.1 million transactions, including payments for goods and services, fund transfers, and cash withdrawals. In comparison, UPI processed 20.5 billion transactions.

“There are forex cards that a bank can issue, and given the surge in the number of Indians travelling overseas on holiday and business trips, such cards will have a good demand,” said Parijat Garg, an independent fintech consultant.

Over 30.9 million Indians travelled abroad in 2024, 10.8% higher than the previous year, showed the latest government data released in September.

Prepaid Payment Instruments

Bank of Baroda eyes prepaid card base of 1 million in 5 years, seeks external assistance