Indian companies can now pay perks to their employees in plastic money. In a move that could pave the way for cashless settlements of perquisites and reimbursements, RBI on Thursday allowed banks to issue pre-paid payment instruments to corporates for onward issuance to their employees.
"Pre-paid payment instruments can be issued only to corporate entities listed in any of the stock exchanges in India," said RBI in its notification.
The pre-paid card can be loaded with a maximum value outstanding of 50,000. According to RBI norms, the corporate would be responsible for the verification of identity of the employee.
"This would enable corporates to make employee reimbursements, which include payment of telephone bills, travel expenses and related payments, hassle free,' said Uttam Nayak, group country manager, India and South Asia at Visa International. "It is yet another step to promote a cashless economy," he added.
To ensure that the facility is not misused, the regulator has asked banks to put in place proper KYC standards for capturing and maintaining details of employees to whom the cards are issued.
"The corporate is also required to make available details of bank accounts (if any) of the employees to the bank," RBI said.
