• Under what powers has the Reserve Bank of India (RBI) issued the Master Direction (MD) on Issuance and Operations of Prepaid Payment Instruments (PPIs)?

Ans. In exercise of the powers conferred under Section 18 read with Section 10(2) of the PSS Act, 2007, RBI has issued these Directions. 

  • Who can issue and operate PPIs in India?

Ans. A company incorporated in India and registered under the Companies Act, 1956 / Companies Act, 2013 can issue and operate PPIs after receiving authorisation from RBI.

  • How many PPI issuers have been approved by RBI? Where can I find the list of authorised bank and non-bank PPI issuers?

Ans. The list is available on the RBI website at the link

  • What are PPIs?

Ans. PPIs are instruments that facilitate purchase of goods and services, including financial services, remittance facilities, etc., against the value stored on such instruments. PPIs that can be issued in the country are classified under three types viz. (i) Closed System PPIs, (ii) Semi-closed System PPIs, and (iii) Open System PPIs.

  • Who is an issuer of PPI?

Ans. PPI issuer is an entity operating / participating in a payment system for issuing PPIs to individuals / organisations. The money so collected is used by the entity to make payment to the merchants who are part of the acceptance arrangement and for facilitating funds transfer / remittance services. 

  • Who is a holder of a PPI?

 A holder is an individual / organisation who obtains / purchases PPI from the PPI issuer and uses the same for purchase of goods and services, including financial services, remittance facilities, etc. However, in case of a Gift PPI, the targeted beneficiary (though not being a purchaser) can also be a holder.

  • What are various types of PPIs?

Closed System PPIs: These PPIs are issued by an entity for facilitating the purchase of goods and services from that entity only and do not permit cash withdrawal. As these instruments cannot be used for payments or settlement for third party services, the issuance and operation of such instruments is not classified as payment system requiring approval / authorisation by the RBI. 

Semi-closed System PPIs: These PPIs are issued by banks (approved by RBI) and non-banks (authorized by RBI) for purchase of goods and services, including financial services, remittance facilities, etc., at a group of clearly identified merchant locations / establishments which have a specific contract with the issuer (or contract through a payment aggregator / payment gateway) to accept the PPIs as payment instruments. These instruments do not permit cash withdrawal, irrespective of whether they are issued by banks or non-banks.

Open System PPIs: These PPIs are issued only by banks (approved by RBI) and are used at any merchant for purchase of goods and services, including financial services, remittance facilities, etc. Cash withdrawal at ATMs / Points of Sale (PoS) terminals / Business Correspondents (BCs) are also allowed through such PPIs.

  • Does a holder earn any interest on PPI balances?

Ans. No interest is payable on PPI balances.

  • How can a PPI be loaded?

Ans. PPIs can be loaded / reloaded by cash, by debit to a bank account, by a credit / debit card, or from other PPIs. The loading / reloading of PPIs shall be through payment instruments issued by entities regulated in India and shall be in Indian Rupees (INR) only. Banks and non-banks are permitted to issue and reload such payment instruments through their authorised outlets / branches / ATMs or through their authorised / designated agents.

  • Is there any limit on loading of PPIs by cash or electronic means?

Ans. Yes, the cash loading of PPIs is limited to ₹ 50,000/- per month subject to overall limit of the PPI. The limit on loading of PPIs via electronic / online means is subject to overall limit of the PPI.

  • In what form can a PPI can be issued?

Ans. The PPIs may be issued as cards, wallets, and any such form / instrument which can be used to access the PPI and to use the amount therein. PPIs in the form of paper vouchers shall no longer be issued.

  • In what form prepaid meal instruments can be issued? Are they allowed to be reloaded?

Ans. Like any PPI, prepaid meal instruments may be issued as cards, wallets, and in any such form or instrument (except in the form of paper vouchers) which can be used to access the PPI and to use the amount therein. Prepaid meal instruments can be issued only as semi-closed PPIs without cash withdrawal and funds transfer.

  • Can a remitter create new PPIs for each cash based remittance?

Ans. PPI issuers, including their agents, shall not create new PPIs each time, for facilitating cash-based remittances to other PPIs / bank accounts. PPIs created for previous remittance by the same person shall be used.

  • Can co-branded PPIs be issued?

Ans. Yes. PPIs can be issued on solo basis by a PPI issuer or on co-branded basis with another entity.

  • Who can be a co-branding partner of the PPI Issuer?

Ans. The co-branding partner shall be a company incorporated in India and registered under the Companies Act, 1956 / Companies Act, 2013. In case the co-branding partner is a bank, then the same shall be a bank licensed by RBI. In case of co-branding arrangement between a bank and a non-bank entity, the bank shall be the PPI Issuer. In case both the entities are non-banks, one of them will be pre-assigned, in advance, the role of issuer among themselves.

  • Can PPIs be used for cross-border inward transactions? What are the transaction limits?

Ans. Banks and non-bank PPI issuers, who are Indian agents of the authorised Overseas Principal (OP), are permitted to issue KYC compliant PPIs to beneficiaries of inward remittance under the Money Transfer Service Scheme (MTSS) of the RBI. It means that the entity undertaking this activity needs to be an authorised PPI issuer as well as an Indian Agent under MTSS (authorised by Foreign Exchange Department, RBI).

  • What are the types of Semi-closed PPIs?

Ans. Semi-closed PPIs can be of two types:

  • What are salient features of ‘minimum detail PPI’?

The salient features of ‘minimum detail PPI’ are as follows:

  • These PPIs are reloadable in nature.
  • The amount loaded during any month shall not exceed ₹ 10,000/- and the total amount loaded during the financial year shall not exceed ₹ 1,00,000/-.
  • The amount outstanding at any point of time shall not exceed ₹ 10,000/-.
  • The total amount debited during any given month shall not exceed ₹ 10,000/-.
  • These PPIs shall be used only for purchase of goods and services. Funds transfer to bank accounts or PPIs of same / other issuers shall not be permitted.