Meal Cards – ING Vysya Bank-a new player

Meal Cards – ING Vysya Bank a new player

ING Vysya Bank, a Leading Private Sector Bank has introduced the Meal Card.

A brief articles of the occasion can be accessed at

http://www.thehindubusinessline.com/2009/08/22/stories/2009082251460600.htm

ING Vysya Bank’s Meal Card will be accepted at all Maestro Merchant Establishments.

It is be noted that in India, Meal Cards are being mainly issued by Private Banks. So far, no Public Sector Bank has introduced the Meal Card.

My guess is State Bank of India, Union Bank of India, Andhra Bank, might take the lead. Or Bank of Baroda, too could.

Let us wait and see, which of the Public Sector Banks, takes the lead.

What is a Meal Card:

Meal Card is a prepaid card designed to replace the inefficient paper voucher system in the market.

It is a far more operationally efficient way to provide your employees with a meal allowance and eliminates the logistical hassles associated with the procurement, stock-keeping and distribution of paper-based Meal Vouchers.

Meal Card’s	Paper Based Vouchers
1. No operational hassles in distribution to employees, issued once and reloaded again and again without any trouble	Monthly distribution of paper coupons, keeping track of stock and reconciliation together give rise to an operation nightmare.
2. Larger acceptance, freedom to use the card at almost 40,000 food and beverage outlets in the MasterCard network.	Limited access to only the few outlets specifically accepting such paper based coupons
3. Easier to handle, the Meal Card is a plastic card to be carried along with your normal debit and credit cards and presented for use anytime you need to pay for some food or beverage items.	Carrying the booklet of vouchers around, counting vouchers every time you need to pay for something is an unnecessary burden best avoided
4. Use your Meal Card for any denomination you want, don't worry if the amount is an odd amount	The Paper vouchers come in specific denominations and while paying you have to pay in those denominations thus resulting at times in loss of some change. Seen in accumulation this change comes quite a large amount, sometimes even the cost of a good meal.

Reserve Bank of India, has already laid down guideline regarding Issuance and Operation of Pre-paid Payment Instruments in India (Reserve Bank) Directions, 2009

The complete Document can be accessed at

http://rbidocs.rbi.org.in/rdocs/notification/PDFs/RFGF280409.pdf

In brief, the RBI guidelines for clients affiliates and users

The RBI released the "Insurance and Operation of Pre-Paid Payment Instruments in India (Reserve Bank) Direction 2009" on April 27, 2009. These rules have become operative from July 27, 2009.

Accordingly, the Customers and Affiliates are required to comply with the following:

1. Institutions are required to maintain the full details of beneficiaries to whom Vouchers/Payment Instruments are issued.

2. Payment instruments upto Rs 50,000/- can be issued by you provided full KYC of the employee or beneficiary has been completed as prescribed by RBI guidelines.

3. Payment instruments can be issued upto Rs 50,000/- by carrying out customer due diligence. This should be done by companies/institutions by ensuring that they keep full details of the employees/beneficiaries to whom the payment instruments are issued.

4. Customers should make advance payment as the same needs to be deposited in Escrow Account on issuance of vouchers.

5. Customers and Affiliates need to comply with the Know Your Customer / Anti-Money Laundering & Combating Financing of Terrorism Guidelines issued by RBI.

However, recently Income Tax Department has issued guidelines, which might reflect on the growth of Meal Cards in our country.