In the current age of globalisation, international travel, and cross-border transactions have become commonplace. To make these transactions easy and hassle-free, banks offer various payment instruments, including international debit cards and forex cards. In this article, we will discuss these payment instruments, their benefits, and the guidelines issued by the Reserve Bank of India (RBI) regarding their usage.
International Debit Card:
An international debit card is a payment instrument that enables customers to make transactions in foreign currency. It is linked to a customer’s bank account and can be used to withdraw cash from ATMs and make purchases at Point of Sale (POS) terminals. International debit cards come with a Visa or MasterCard logo, which makes them widely accepted across the world.
Benefits of International Debit Card:
Convenience: International debit cards allow customers to make transactions in foreign currency without the need for currency conversion or carrying cash.
Security: International debit cards come with multiple layers of security, including chip and PIN, two-factor authentication, and transaction alerts, making them a secure payment instrument.
Rewards: Banks offer various rewards and cashback schemes to customers for using their international debit cards for transactions.
The RBI has issued guidelines for the usage of international debit cards. As per the guidelines, the maximum amount that can be withdrawn from an international ATM is USD 500 or its equivalent per day. The maximum amount that can be spent using an international debit card is USD 10,000 per financial year.
Mr. Ranveer is a businessman who frequently travels abroad for work. He uses his international debit card to withdraw cash from ATMs and make purchases. On one of his trips, he lost his international debit card, and someone used it to withdraw money from his bank account. Mr. Sharma immediately reported the loss to his bank, which blocked the card and refunded the money that was fraudulently withdrawn.
A forex card is a prepaid payment instrument that allows customers to load multiple foreign currencies on a single card. It can be used to withdraw cash from ATMs and make purchases at POS terminals. Forex cards come with a Visa or Mastercard logo, which makes them widely accepted across the world.
Benefits of Forex Card:
Convenience: Forex cards allow customers to carry multiple currencies on a single card, making them a convenient payment instrument for international travel.
Security: Forex cards come with multiple layers of security, including chip and PIN, two-factor authentication, and transaction alerts, making them a secure payment instrument.
Cost-effective: Forex cards offer competitive exchange rates and lower transaction fees compared to other payment instruments, making them a cost-effective option for international transactions.
The RBI has issued guidelines for the usage of forex cards. As per the guidelines, the maximum amount that can be loaded on a forex card is USD 2,50,000 or its equivalent per financial year. The maximum amount that can be spent using a forex card is USD 10,000 per financial year.
Ms. Ayesha is a student who is pursuing her studies in the United States. She uses a forex card to pay for her tuition fees and living expenses. On one occasion, she needed to transfer money from her forex card to her bank account. She approached her bank and submitted the necessary documents as per RBI guidelines. The bank transferred the money to her bank account within the stipulated timeframe.
International debit cards and forex cards are convenient and secure payment instruments for international transactions. Banks have to comply with RBI guidelines regarding their usage to ensure the safety and security of customers’ transactions. Customers can benefit from these payment instruments by understanding their benefits and guidelines and using them judiciously.
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