The Reserve Bank of India has issued new guidelines for the issuance and operation of pre-paid payment instruments by banks and non-banks entities and capped their maximum value at INR50,000.
Commenting on the new norms, Reserve Bank of India said: "the developments in the pre-paid payment instrument segment had necessitated a comprehensive review of guidelines issued so far. It was also desirable that all instructions on pre-paid payment instruments are made available at one place."
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The central bank said that it has tightened norms to ensure that all issuers comply with the strict money laundering laws and all the related KYC norms.
Additionally, the new norms will provide a framework for regulation and supervision of pre-paid payment systems in a customer-friendly manner.
Under the new norms, cards will not be issued without verifying the KYC as well as the issuer name should be visible on the payment instrument.
According to the Reserve Bank of India, the new standards will also include internet wallets, mobile accounts, mobile wallets, paper vouchers and other instruments that are used to access the pre-paid amount.
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By GlobalDataAs part of the new rules, non-bank entities, non-NBFC issuers are required to have a minimum paid-up capital of INR50m and minimum positive net worth of INR10m at all the times.
On the validity of pre-paid gift instruments, the new norms have capped it at one year and also banned issuers from reloading the card.
