The Hindu Business Line : Nod for ‘semi-closed’ instruments

The Reserve Bank of India has permitted entities other than banks and non-banking financial companies to also issue prepaid semi-closed payment instruments. Earlier, they were permitted to issue only closed payment instruments. Semi-closed payment instruments are those which are redeemable at a group of clearly identified merchant locations/ establishments which contract specifically with the issuer to accept the payment instrument. However, a closed instrument is issued b y business establishments for use at their respective establishment only. These instruments do not permit cash withdrawal or redemption. The maximum value of semi-closed payment instruments issued by entities other than banks and NBFCs should not exceed Rs 5,000, the RBI said.

— Our Bureau

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