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May 2, 2014

Muthoot Finance seeks regulatory permission to launch prepaid cards in India

Muthoot Finance, a gold finance company in India, has sought the Reserve Bank of India (RBI) approval to pre-load a part of a gold loan in dedicated cards.

By Verdict Staff

Muthoot Finance, a gold finance company in India, has sought the Reserve Bank of India (RBI) approval to pre-load a part of a gold loan in dedicated cards.

The company, which has entered the white label ATM landscape, believes that such scheme will benefit both the company as well as borrowers, as reported by PTI.

Muthoot Finance chief executive (ATM division) P E Mathai was quoted by PTI as saying, "We have written to the RBI to allow us to disburse money through cards under which an amount can be pre-loaded on them and withdrawn by the gold loan customer whenever needed."

Mathai further added that charging of interest will start after the withdrawal of the amount.

In order to facilitate easy transaction, Muthoot Group is planning to install nearly 9,000 white label cash vending machines over the next three years.

The company also said that its cardholders will also be able to withdraw cash at any ATM.

Mathai said that the company has also requested RBI to allow it to unveil a special card to withdraw remittances using any f ATMs.

Underlining the company’s plan, he said, "anybody can send money into the card and it can be withdrawn by the beneficiary from an ATM", and added this will be applicable for both the domestic and international remittances.

The banking watchdog has granted an "in-principle" approval for both the proposals; however, formal communication has to reach yet.

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