The order had led to strong resentment among locals and the vendors who agitated against it by refusing recharge to prepaid subscribers.
In a statement on Friday evening, a police spokesman said, "Instructions issued to vendors to maintain records of customers using prepaid cards have been rescinded, following assurances by the mobile service providers to provide such details centrally."
"Accordingly, the district police authorities have been asked not to collect any details from vendors."
Over 20,000 local youth associated directly with the business across the Valley had threatened closure of their business if the order was not withdrawn.
The administration had banned prepaid SIM cards of all the service providers in the Valley in the aftermath of the 2010 unrest that left 112 dead and hundreds others wounded.
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