To provide payment options to Indians traveling abroad, the RBI Governor has permitted banks in India to issue RuPay prepaid forex cards for use at ATMs, POS machines and online merchants abroad.
After the end of the RBI MPC meeting on Thursday, June 8, RBI Governor Shaktikanta Das announced several important decisions. In which there is an announcement to make Rupay prepaid forex card to the banks. With this decision, the importance of Rupay card will increase worldwide. Along with this, people going to foreign lands will be very comfortable. Through this card, people will have more options to make payments on foreign soil. This card can also be used at ATMs, POS machines and online merchants abroad. According to the RBI governor, this forex will increase the acceptance of RuPay card at the global level along with increasing its reach. Let us also give you detailed information about it.
After all, what has been announced on Rupay Forex Card?
Announcing the decisions taken after the RBI MPC meeting was over, the RBI Governor informed that to provide payment options to Indians traveling abroad, banks in India will be allowed to use ATMs, POS machines and online merchants abroad. Permission has been given to issue RuPay Prepaid Forex Card. Apart from this, RuPay Debit, Credit and Prepaid cards can also be easily used abroad. This decision from RBI is very important. The reason for this is that the RBI and the government want to increase the reach and acceptance of RuPay card at the global level. According to RBI, necessary instructions for this will be issued separately.
How will RuPay Forex Card work?
Generally, when you opt for prepaid forex cards, you need to load these cards with one or more foreign currencies and use them interchangeably in different countries.
What seems to be a charge?
A prepaid forex card usually has funds already in it. You can also add money to the card online. Some companies can also charge a nominal charge from you, while many banks provide this service for free as well. However, the exchange rate used for any foreign currency purchases you make against the card is usually higher than the interbank exchange rate to cover operational costs. Hence, you should check the margin the issuer charges for the interbank exchange rate.
What kind of benefits will there be?
1. Preloading a forex card locks in the exchange rate and is one of the safest options to use abroad. Hence, these cards protect you from frequently changing exchange rates and fluctuations.
2. If you use the card within the same currency jurisdiction for which you have loaded the card, the extra currency mark-up charge is not applicable on these cards.
3. In a media report, Adil Shetty, CEO of BankBazaar.com, says that the RuPay card has been designed to meet the specific needs and preferences of Indian users. With the introduction of the Rupay Prepaid Forex Card, payment options for Indians traveling abroad have expanded further.
4. On the other hand, you also have to keep in mind that if you spend more than Rs 7 lakh from July 1, you will have to pay 20 per cent TCS (tax collected at source).
5. Through ATM withdrawal and balance check of these cards may also be charged. Hence, you need to be careful while using prepaid cards abroad.
6. Moreover, these cards also have a daily withdrawal limit, so you need to plan your spending accordingly.
Forex vs credit/debit card
Most of the credit or debit cards used in India have international acceptance. These cards are generally issued through global networks such as Visa and MasterCard. Currently, you can also use all RuPay Global cards for international transactions. However, you can use such card at Diners Club, Discover, JCB ATM, Unionpay and Pulse. While credit cards are convenient and widely accepted, they attract a forex mark-up at the rate of 20 per cent (with effect from July 1) and TCS by the government on spends above Rs 7 lakh in forex transactions.
For example, there is a forex mark-up charge (a charge levied on each forex transaction) of 0-4 per cent which varies from credit card provider to credit card provider. If you make a purchase of Rs 1 lakh using your International Credit Card, you may have to pay an additional Rs 4000 as forex charges. Hence, the Forex Card protects you from the high mark-up charges levied on International Debit and Credit cards.
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