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Presenting plastic

Smita Tripathi | November 15, 2003 13:00 IST

Sanjana Kapoor was in a fix. The 26-year-old advertising executive had to give a friend a wedding present but couldn't think of anything worth buying.

Finally, she settled on a halfway house: she presented her friend a pre-paid gift card. Says Kapoor: "I didn't know what present to buy that would be liked by both the bride and the groom. But I didn't want to give cash."

The gift card is the latest variation being offered by banks which are desperately searching for innovative offerings in a competitive market.

These cards are also better than gift coupons, because unlike gift coupons which are restricted to the shop from where they are bought, a card can be used at thousands of places.

The gift card is one of many types of pre-paid cards that are being offered to customers.

IDBI Bank, for instance, has just launched the IDBI Gift Card and Oriental Bank of Commerce is offering what it calls a pre-paid card.

At a slightly different level, UTI Bank has recently launched the Travel Currency Card aimed at people travelling abroad.

How do these cards work? The IDBI card is available in denominations starting from Rs 1,000 to Rs 20,000 and is valid for one year. IDBI Bank has tied up with Visa and the card can be used at 51,000 merchant establishments across the country.

A processing fee of Rs 100 is charged and the card comes in a gift envelope where you can write a message for the person you are gifting the card to.

Where can you use these cards? OBC has tied up with MasterCard and the pre-paid card can be used at more than 60,000 merchant establishments.

If the person wants to use the card at some other shop, that's also possible. The amount on the card can be withdrawn as cash from any of the 4,700 MasterCard ATMs.

The OBC card is valid for two years and is available in denominations of Rs 1,000 to Rs 50,000.

Payments for these cards must be made either by cash or cheque and it isn't necessary to have an account with the concerned bank. The card is given to you over the counter.

Currently, the OBC card is available only in Delhi and Mumbai while the IDBI Gift Card is available at all IDBI branches.

The IDBI Gift Card comes with a pin number for security reasons. In order to activate the card you first need to punch in the pin at an IDBI ATM.

UTI Bank's Travel Currency Card is for people travelling abroad.

Says Sameer Nemavarkar, assistant vice president, retail banking, UTI Bank: "The product that we have launched has evolved after a close look at the various options that are available to a foreign traveller. Currently, a person travelling abroad can use travellers cheques, currency, international cards and such. But each of these has limitations. The Travel Currency Card aims at overcoming those limitations."

The Travel Currency Card is a pre-paid card which has dollars loaded on which can be used anywhere in the world where Visa cards are accepted. What's more, it's also possible with the card to withdraw cash from any Visa ATM.

The minimum amount that can be loaded on the card is $500 and the maximum depends upon the guidelines issued by the RBI.

Though the card is denominated in US dollars, it can be used in any country in the world in the local currency of that country.

Again, you don't need to have an account with UTI Bank. You just need to fill up a form and attach all the necessary documents which include a copy of your passport and ticket, and the card is issued to you.

Says Nemavarkar, "Unlike traveller cheques, you are saved the trouble of looking for a money changer. Also, the card is more easily available than an international credit card."

In order to buy a Travel Currency card, you need to pay Rs 150 as the initial sale fee. Other charges include $2 every time you withdraw from a Visa ATM and $.50 every time you use an ATM to check your balance.

The card is valid for two years and you can recharge it before every trip. You need to pay Rs 100 as renewal fee.

On your return to India, you can either keep the balance on the card (up to $2,000) for future trips or encash it at any branch of  UTI Bank.

Insurance cover of up to Rs 200,000 is available if you lose the card. The insurance comes into effect from the moment you report the loss to UTI.

Additional reporting: Arti Sharma

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