The Reserve Bank of India (RBI) on Thursday released guidelines for issuance of prepaid payment instruments (PPIs), or prepaid wallets, by cooperative banks having their own ATM network.
The central bank removed the Rs10,000-cap on utility bill payments through semi-closed wallets issued by eligible cooperative banks. “The matter has been revisited and it has now been decided to permit all licensed cooperative banks having their own ATM network to issue semi-closed PPIs, provided there is no restriction on acceptance or repayment of deposits,” said a notification on the RBI website.
In addition, co-operative banks will be entitled to issue open-system PPIs as long as they are core banking solution (CBS)-compliant and meet certain financial criteria. Their CRAR should not be less than 10% in the current and preceding financial year, gross non-performing assets (NPAs) should be less than 7%, net NPAs should not be more than 3% and assessed net worth should be more than Rs25 crore as per the last RBI inspection.
The bank should also not have defaulted in the maintenance of CRR or SLR during the current and preceding financial year. It should have made a net profit in the preceding financial year. It must also have two professional directors on the board of the bank and have in place an internal inspection/audit system for all branches and the head office as well as a concurrent audit system in all major branches.
Banks that have had a monetary penalty imposed on them in the last two financial years and during the year of submitting the application will not be eligible to issue open wallets. The wallet-issuing bank will need to have a comprehensive board-approved policy on the customer grievance redressal mechanism, which would include an escalation matrix for resolution of complaints.