India's financial regulator the Reserve Bank of India (RBI) is set to introduce guidelines which will allow banks as well as qualified non-banking entities to issue prepaid instruments such as prepaid mobile vouchers and mobile wallets, Indian newspaper Business Standard reports.

According to RBI, the maximum value of any prepaid payment instrument should not exceed EUR 758 (INR 50,000). The RBI's decision comes after it received comments on a draft proposal that sought to allow banks and eligible non-banking financial Companies (NBFCs) to issue pre-paid vouchers with a cap set at EUR 758 (INR 50,000).

The money stored on the prepaid instruments in question will be equivalent to the value paid by the holder either in cash or through a debit/credit card. These prepaid payments services will allow consumers to purchase goods and withdraw cash from ATMs. The vouchers can only be redeemed at identified establishments which had earlier entered into a contract with the issuer for honouring such instruments.

Once the operating guidelines are issued by the RBI, the banks and non-banking entities could issue instruments such smart cards, magnetic strip cards, internet accounts, internet wallets, mobile accounts, mobile wallets and prepaid vouchers.

Under the new guidelines, the regulator forbids payments with prepaid mobile phone credit for goods and services other than mobile content. Only banks and finance companies will be allowed to issue pre-paid cards which are accepted outside a closed group.