The Reserve Bank on Tuesday introduced a new semi-closed prepaid payment instrument (PPI) which can be used for transaction of goods and services up to a limit of Rs 10,000.
The Reserve Bank on Tuesday introduced a new semi-closed prepaid payment instrument (PPI) which can be used for transaction of goods and services up to a limit of Rs 10,000. The loading facility of the instrument will be linked only from a bank account.
In the monetary policy review earlier this month, the RBI had said it will introduce these kind of PPIs in order to promote small value digital transactions.
“To give impetus to small value digital payments and for enhanced user experience, it has been decided to introduce a new type of semi-closed PPI,” RBI said in a notification.
The main features of these instruments are: such PPIs will be issued by bank and non-bank PPI issuers after obtaining minimum details of the PPI holder. The minimum details will necessarily include a mobile number verified with one time pin (OTP) and a self-declaration of name and unique identity/identification number, among others.
“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 Rs 10,000 and the total amount loaded during the financial year shall not exceed Rs 1,20,000,” the RBI said.
The amount outstanding at any point of time in such PPIs should not exceed Rs 10,000, RBI said, adding these PPIs will be used only for purchase of goods and services and not for funds transfer. The instrument issuers will 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, it added. There are currently three kinds of PPIs allowed by RBI — closed system, semi-closed and open PPIs.