The Reserve Bank of India has allowed banks to facilitate issuance of prepaid payments instruments (PPIs) to unlisted corporates, public entities like municipal corporations and urban local bodies to deepen digital transaction system.
“In order to facilitate greater adoption of digital payments, banks may include other entities/employers such as unlisted corporates, partnership firms, sole proprietorship, public organisations like municipal corporations, urban local bodies (employers) for onward issuance to their staff or contract workers,” the RBI said. Pre-paid payment instruments helps purchase of goods and services, including funds transfer, against the value stored in it.
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Earlier, firms were required to be listed on any of the bourses in India to be eligible to get prepaid instruments issued by banks. RBI also instructed banks to issue PPIs to only those entities that have a bank account with them and also upon an undertaking that they do not avail this facility from any other bank.
Verification of the identity of the staff / employees / contract workers, etc shall be the responsibility of the concerned employer, RBI said, adding the bank should put in place proper systems to capture and maintain details of the employees to whom the PPIs are issued. “Banks shall load/reload PPIs after obtaining necessary authorisation and details of the employees/staff/contract workers, etc. from the employers,” the RBI said.
As per RBI norms, a PPI can be loaded with maximum Rs 50,000. Also, if the PPI owner wants to transfer fund to the regular bank account, the bank is mandated to facilitate it. Among others, banks are also responsible to provide all customer service aspects related to the PPI. The above changes will come into effect from the date of this circular, the RBI said.