About two years ago the Times Group launched Wallet365 with a lot of hype only to have it stalled by the RBI. It is now believed to be considering the regularization of internet payment options. An approach paper on the subject is under consideration by the RBI.

As per the Payment and Settlement Systems Act all non financial institutions have to obtain a RBI clearance for operating pre paid payment instruments. The KNC (Know Your Consumer) initiative by the RBI specifies limits for financial transactions beyond which it is necessary to obtain all information regarding clients.

If the RBI gives the green signal for internet based cash cards and pre paid payment options, it will spawn a fresh competition in the financial sector. An Indian version of PayPal may soon become a reality.