Regulator Reserve Bank of India has agreed to allow companies to issue prepaid cards to their employees as perks. This step by the regulator is a move towards promoting cashless settlements.

Prepaid cards can be issued to employees as gift cards with preloaded amount of money equivalent to their perk amount.

The maximum amount that can be loaded in the card is Rs 50,000.

"Pre-paid payment instruments can be issued only to corporate entities listed in any of the stock exchanges in India," read a notice by RBI.

"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.

However banks have been directed by RBI to ensure that proper KYC norms are followed while issuing such cards.