RBI Directive: Banks to Introduce RuPay Prepaid Forex Cards
The Reserve Bank of India (RBI) has decided to issue ‘Rupee Prepaid Forex Cards’ to banks. This move by the RBI will provide a new payment option to Indian travelers going abroad. RBI Governor Shaktikanta Das announced this decision on June 8th, Thursday.
A Forex card can be used at an international level. It can be used at ATMs, POS machines, and for online transactions abroad. In addition to banks, Rupay debit cards, credit cards, and prepaid cards can also be issued by banks in foreign countries. These can be used at both domestic and international levels, including in India.
Shaktikanta Das stated that the acceptance of Rupay debit and credit cards issued by banks in foreign countries is increasing. Now, the central bank has given approval to banks for issuing RuPay prepaid forex cards.
The Forex card will provide a convenient option for cross-border transactions. Rajashree Rangan, Head of Development Banking and Payments at FIS India, mentioned that the approval for banks to issue RuPay prepaid forex cards will facilitate easy cross-border transactions. This will not only benefit international trade but also provide numerous conveniences to individuals involved in international business. With the RuPay prepaid forex card, people traveling abroad will also have access to various facilities, including ATM withdrawals, PoS machines, and other merchant points.
Adhil Shetty, CEO of BankBazaar.com, has stated that the availability of RuPay prepaid forex cards in foreign jurisdictions will strengthen the options for foreign exchange transactions. As RuPay is a product of NPCI (National Payments Corporation of India), its presence will enhance the position of RuPay cards in the retail payment system within the country. This development will contribute to the robustness of options for foreign currency transactions and make them more reliable.
Under the Payment and Settlement Systems Act of 2007, the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) have been empowered to establish a secure electronic payment and settlement system. The launch of the RuPay card aims to encourage digital payments and economic growth while fostering the development of a self-reliant and robust financial system.
In the past seven years, RuPay has introduced various types of cards to cater to different needs. Apart from special cards for government schemes, RuPay offers Classic, Platinum, and Select variants. These cards are designed to meet the requirements of both regular and affluent individuals.
Shetty has mentioned that RuPay cards have been designed keeping in mind the needs of Indian consumers. He stated that RuPay has emerged as a credible alternative in the payment space, with a significant increase in its acceptance and popularity over the past few years. The acceptance of RuPay cards has witnessed tremendous growth, not only in India but also in many locations worldwide.
Currently, RuPay cards are primarily available for use within India. Ashish Agrawal, the Managing Director of Acube Ventures Global Private Limited, has mentioned that RuPay cards can be used only in the country at present. Its usage is limited to the countries with which India has agreements for such transactions.
Conclusion:
The RBI’s recent directive mandating banks to issue RuPay prepaid forex cards represents a significant step towards streamlining foreign exchange transactions in India. By providing a secure and convenient alternative to cash, these cards are poised to enhance the travel experience for Indian individuals and businesses alike. The wide acceptance, multi-currency feature, and emphasis on customer education and security make RuPay prepaid forex cards a promising instrument in the realm of international travel. As banks work towards implementing the RBI’s directive, it is expected that the adoption of these cards will witness a substantial increase, leading to a transformation in the way Indians transact during their trips abroad.
