New Delhi : The Reserve Bank of India on Friday allowed all co-operative banks with their own network of automated teller machines to issue semi-closed pre-paid payment instruments, provided there are no curbs on acceptance or withdrawal of deposits from these banks. Semi-closed pre-paid payment instruments allow for the purchase of goods and services at certain merchant locations as per a contract with the issuer.
These instruments can’t be used for cash withdrawal or redemption by the holder. The regulator also allowed eligible co-operative banks to issue open system pre-paid payment instruments, which can be used to buy goods and services through point-of-sale terminals.
These instruments can also be used to withdraw cash from automated teller machines and business correspondents.