Reloading of the wallet and remittances, however, will only be permitted after compliance with KYC requirements.
The Reserve Bank of India (RBI) on Monday clarified that customers using mobile wallets and other prepaid payment instruments (PPIs) will be able to use their existing wallet balances to make purchases even if full KYC norms have not been carried out by February 28. Reloading of the wallet and remittances, however, will only be permitted after compliance with KYC requirements. The central bank also made it clear that there will be no further extension of the deadline for PPI issuers to complete KYC for their users. The earlier deadline for ensuring KYC compliance for wallet users was December 31, 2017. BP Kanungo, deputy governor, RBI, said the KYC guidelines are a necessary step to pave the way for interoperability between PPIs, bank accounts and cards in a phased manner. “The deadline was extended up to 28 February, 2018 at the request of certain PPI issuers. Therefore, sufficient time has already been given to meet the prescribed guidelines,” he said, adding, “In the event of PPI issuers not obtaining the KYC related inputs of their customers within the timeline, the customer will not lose their money.
They can continue to undertake transactions for purchase of goods and services as hitherto to the extent of available balance in the PPI.” An exception will also made to the rule of wallet balances not being repatriated to bank accounts. Customers who do not wish to continue using a PPI will have the option of closing down their wallet and transferring the remaining balance in it to their bank account. On October 11, 2017, RBI had issued master directions for issuers of PPIs. One of the key directives was that full KYC be carried out for users of wallets. According to people in the payments industry, the share of wallet users who would have opted for KYC is less than half of the existing wallet user base. Last week, the regulator wrote to payments banks backed by telecom companies stating that they must carry out separate KYC for their bank account holders as KYC done under the telco would not be valid for the purposes of the bank.