RBI introduces semi-closed Prepaid Payment Instrument

Dec 26, 2019 | by Avantis RegTech Legal Research Team


Industry Specific Compliance

The Reserve Bank of India (RBI) on December 24, 2019, has introduced a new type of semi-closed Prepaid Payment Instrument (PPI) to give impetus to small value digital payments and for enhanced user experience, issued by bank and non-bank PPI issuers. These PPIs shall be used only for purchase of goods and services and not for funds transfer.

The followings are the features of PPI:-

1. The PPIs shall be issued by bank after obtaining minimum details of the PPI holder. The minimum details shall include a mobile number verified with One Time Pin (OTP) and a self-declaration of name and unique identity or identification number. PPI issuers shall provide an option to close the PPI at any time and also allow to transfer the funds ‘back to source’ (payment source from where the PPI was loaded) at the time of closure.

2. It shall be reloadable in nature and shall be done from a bank account, issued in card or electronic form.

3. The amount loaded in such PPIs during any month shall not exceed Rs. 10,000 and the total amount loaded during the financial year shall not exceed Rs. 1,20,000. The amount outstanding at any point of time in such PPIs shall not exceed Rs. 10,000.

4. The PPI issuers shall provide an option to close the PPI at any time and also allow to transfer the funds ‘back to source’ (payment source from where the PPI was loaded) at the time of closure.

[RBI/2019-20/123 DPSS.CO.PD.No.1198/02.14.006/2019-20]


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