India

Read RBI rules for prepaid cards While Travelling by metro.

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Mumbai,july.20: India is rapidly witnessing metro rail development in several cities. The government is emphasizing on building new smart cities and development of urban infrastructure. The RBI on Monday unveiled rules for issuing prepaid cards on mass transit systems in cities. You can use these cards for your daily commute through your city’s metro, bus or other transport. You can also use it merchant locations to make payments.

Here are 5 things to know:

1. What is mass transit system: Mass transit system is shared transportation that can carry a large number of passengers from one place to another. Rapid transit comprises of bus, metro, mono rail and light rail.

2. What are prepaid instruments: Semi prepaid instruments facilitate purchase of goods and services against the value stored on such instrument. The pre-paid instruments can be issued as smart cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers and any such instrument which can be used to access the pre-paid amount (collectively called Prepaid Payment Instruments hereafter).

3. Semi-closed system pre-paid payment instruments: These can be used for purchase of goods and services, including financial services at a group of clearly identified merchant locations/ establishments which have a specific contract with the issuer to accept the payment instruments. These instruments do not permit cash withdrawal or redemption by the holder.

4. How they work: A new category of semi-closed Prepaid Payment Instruments (PPI) is being introduced. It would be issued by mass transit operators and have an automated fare collection system. Apart from the mass transit system, this instrument can also be used at other merchants whose activities are allied to or carried on within the premises of the transit system. It would have a minimum validity of six months from the date of issue and maybe reloadable in nature and at no point of time the outstanding balance can exceed Rs 2000. No cash-outs or refund will be permitted.

5. Less cash society: Mass transit is one such area, where a large number of small value cash payments take place. Considering the population density in India, queues for ticketing are normal. The Reserve Bank of India (RBI) placed on its website the final guidelines on Prepaid Payment Instruments for Mass Transit System (PPI-MTS). Semi-closed prepaid payment instruments for mass transit systems will now be issued to enhance the commuter convenience. It will also facilitate the migration to electronic payments in line with the country’s vision of moving to a less-cash society.

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