RBI introduces prepaid instrument for small-value payments
26 Dec 2019
Reserve Bank of India (RBI) has introduced a new type of semi-closed prepaid payment instrument (PPI) for low-value digital payments, close on the heels of increasing the loan disbursal limit from Rs10 lakh to Rs50 lakh for peer-to-peer (P2P) lending platforms.
The new PPI can be used only for the purchase of goods and services up to Rs10,000 per month and Rs1,20,000 during the entire financial year.
Such PPIs will be issued by banks and non-bank entities after obtaining minimum details of the PPI holder.
The minimum details shall necessarily include a mobile number verified with One Time Pin (OTP) and a self-declaration of name and unique identity identification number of any ‘mandatory document’ or ‘officially valid document’ (OVD) listed in RBI’s master direction on Know Your Customer (KYC), as amended from time to time, RBI said.
- These PPIs shall be reloadable in nature and issued in card or electronic form. Loading / reloading shall be only from a bank account.
- The amount loaded in such PPIs during any month shall not exceed Rs10,000 and the total amount loaded during the financial year shall not exceed Rs1,20,000.
- The amount outstanding at any point of time in such PPIs shall not exceed Rs10,000.
- These PPIs shall be used only for purchase of goods and services and not for funds transfer.
- 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.
- The features of such PPIs shall be clearly communicated to the PPI holder by SMS / e-mail / post or by any other means at the time of issuance of the PPI / before the first loading of funds.
- The minimum detail PPIs existing as on the date of this circular can be converted to the above type of PPI, if desired by the PPI holder.
RBI sad it is modifying the master document to introduce this new type of PPI and that the other instructions contained in the PPI-MD will be applicable to this type of PPI also.