RBI proposes measures to strengthen Prepaid Payment Instruments framework

Mumbai: The RBI on Wednesday proposed several measures to develop a more conducive framework for the long-term growth of Prepaid Payment Instruments (PPIs), including enhanced transaction security and clearer rules on refunds and grievance redressal.

PPI is a payment instrument in which money is loaded and which facilitates subsequent transactions utilising the fund. These instruments are categorised as general purpose PPI, gift PPI, transit PPI, PPI for NRIs, besides certain other specific purpose PPI.



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RBI said that as part of its continued efforts to develop a conducive framework for long-term growth of PPIs with enhanced security of transactions, a comprehensive review of the extant guidelines has been undertaken.

Accordingly, a draft Master Direction on Prepaid Payment Instruments was issued, and comments were invited by May 22, 2026.

A bank permitted by RBI to issue debit cards can issue PPIs, with prior intimation to the Department of Payment and Settlement Systems (DPSS), Central Office, RBI, Mumbai, the draft said.

A non-bank entity too can issue PPIs after authorisation from the RBI.

"A non-bank applicant shall have a minimum net-worth of Rs 5 crore, and shall submit acertificate...from its statutory auditor," the draft said.

Futher, a non-bank PPI issuer should attain a minimum net-worth of Rs 15 crore by the end of the third financial year of authorisation.

In case of general purpose PPI, the RBI proposed that the amount outstanding in such PPI should not exceed Rs 2 lakh at any point of time, and cash loading in such PPI should be limited to Rs 10,000 per month.

The draft further said the maximum value of a Gift PPI should not exceed Rs 10,000 and in case of Transit PPI Rs 3,000.

Also, a PPI wallet may be issued to foreign nationals / NRIs, after physical verification of Passport and Visa, for making Person to Merchant (P2M) payments during their stay in India.

"Loading of such PPI shall be against receipt of foreign exchange by cash or throughany payment instrument. Total amount debited from such PPI during any month shall not exceed Rs 5 lakh," the RBI's draft added.

The draft said refunds in case of failed, returned, rejected, or cancelled transactions should be applied to the respective PPI immediately, even if such refunds result in exceeding the prescribed limits for that specific PPI category.


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Though refunds of transactions done using any other payment instrument would not be credited to PPI.

RBI also proposed that a PPI issuer should facilitate interoperability with card network or Unified Payments Interface (UPI), on the issuer side to a holder of Full-KYC PPI, as per the conditions prescribed by the respective network provider.

"A PPI issuer may also facilitate discovery of PPI on third-party UPI mobile applications," it said.

It also proposes that a PPI issuer should disclose all features of PPI, and all associated charges, validity period and terms and conditions in clear and simple language (preferably in English, Hindi and the local language) to the holder while issuing the PPI.

Agents of the PPI issuer should not impose any charges on the customers, the proposal added.

The draft also proposed norms for limiting liability of customers in unauthorised PPI transaction.

It also said a non-bank PPI issuer shall maintain the funds collected against issuance of PPIs in a separate escrow account (in INR) with a commercial bank in India. PTI