The banking and monetary regulator, RBI has brought about some changes in the prepaid payment instruments issued by banks and non banks. These include instruments like Airtel money, where one can make payments using a mobile phone.
According to RBI release, semi closed prepaid payment instruments can make payments for fees of schools and colleges and also use to pay government taxes. The ceiling for such payments has been fixed at Rs. 10,000.
The RBI has also stated that there isn't a need of separate KYC for such payment instruments. These instruments are very limited in range with regard to acceptance. Only merchants who have had contract with the issuers accept the payment with the instrument.
However, these instruments don't entitle the holder to withdraw cash or redemption in lieu of money. RBI has also directed the issuers to not issue the same holder on more than one occasion.