The Reserve Bank of India (RBI) has proposed to fix the upper limit of amount stored in pre-paid payment instruments (PPIs), including smart cards and mobile wallets, at Rs 1 lakh in view of growing usage of PPIs for purchase of goods and services. According to the RBI’s new draft norms for PPIs, amount in a PPI should not exceed Rs 1 lakh at any point of time if the customer provides full KYC and Rs 20,000 if the customer provides minimum KYC details to the PPI issuing entity. Further, only banks will be permitted to issue open system PPIs after full KYC in addition to semi closed PPIs.
The draft also said that the maximum value of any prepaid payment instrument, where specific limits have not been prescribed, should not exceed Rs 50,000. Also, cash loading to PPIs should be limited to Rs 50,000 per month subject to the overall limit of the PPI.
The RBI had received requests from stakeholders and other entities for relaxations in certain areas while strengthening the norms for safety and security, risk mitigation and customer protection aspects related to usage of PPIs.
The RBI norms further said maximum value in prepaid gift instrument should not exceed Rs 20,000 and in case of PPI for Mass Transit Systems it should not be more than Rs 3,000 at any time. PPIs could be loaded/reloaded by cash, by debit to a bank account, by credit and debit cards, and other PPIs.
The major changes proposed relate to change in entry point norms, KYC, rationalisation of types of PPIs, customer service and protection, risk mitigation measures, complaint redressal mechanism, forfeiture of unutilised balances, fraud monitoring and reporting requirements, among others.
According to the RBI, entities, seeking approval/ authorisation from the RBI for issuance of PPIs should have a minimum positive net worth of Rs 25 crore. The receipt of fresh applications from banks and non-banks for grant of authorisation to operate a payment system for PPI under Payment and Settlement Systems Act, 2007 was suspended till February 28.