What changed
RBI finalized and notified the 'Guidelines for Prepaid Payment Instruments in India' after public comments on an approach paper and draft guidelines. The guidelines are now legally binding under Section 18 of the Payment and Settlement Systems Act, 2007.
What it means for you
Banks and non-bank entities issuing prepaid instruments must align operations with these final rules. This brings regulatory clarity and oversight to a growing payment method, ensuring orderly development. Non-compliance could invite action under the Act.
What you must do
- Review the final guidelines and ensure your prepaid payment instrument operations fully comply.
- Update internal policies, systems, and customer disclosures to meet the new requirements.
- Submit any required compliance reports or applications to RBI within stipulated timelines.
- Train staff on the guidelines to avoid inadvertent violations.
Who it affects
All system providers and participants in payment systems, Banks issuing prepaid payment instruments, Non-bank entities issuing or planning to issue prepaid instruments
What is the legal basis for these guidelines?
The guidelines are issued under Section 18 of the Payment and Settlement Systems Act, 2007, making them legally binding on all issuers and operators.
Who must comply with these guidelines?
All persons currently operating or proposing to operate prepaid payment instruments in India, including banks and non-bank entities.
When do these guidelines take effect?
The notification date is April 27, 2009, and compliance is required immediately for all existing and prospective issuers.