New FAQ Page 2

RbiAnnouncementWeb

FAQ DetailPage Breadcrumb

Search Bar

Search Results

Prepaid Payment Instruments (PPIs)

1. Under what powers has the Reserve Bank of India (RBI) issued the Master Directions (MD) on Prepaid Payment Instruments (PPIs) dated August 27, 2021 (MD-PPIs) ? +

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

2. What are PPIs ? +

Ans. PPIs are instruments that facilitate purchase of goods and services, conduct of financial services, enable remittance facilities, etc., against the value stored therein.

3. Who are the issuers of PPIs ? +

Ans. PPIs can be issued by banks and non-banks. Banks can issue PPIs after obtaining approval from RBI. The non-bank PPI issuers are companies incorporated in India and registered under the Companies Act, 1956 / 2013. They can operate a payment system for issuing PPIs to individuals / organisations after receiving authorisation from RBI.

4. Who is a holder of a PPI ? +

Ans. A holder of a PPI is an individual who obtains / purchases the PPI from the PPI issuer. However, in case of a gift PPI, any other intended / targeted beneficiary, though not being the purchaser, can also be a holder.

5. What do PPI issuer entities do with the monies collected from PPI holders ? +

Ans. The monies so collected by the PPI issuers are to be used to make payments to merchants who are part of the acceptance arrangement and for facilitating funds transfer / remittance services on behalf of the PPI holders.

6. 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 of PPI issuers is available on the RBI website at the links https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=2491 (bank-PPI issuers) and https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=12043 (non-bank PPI issuers).

7. What are Closed System PPIs ? +

Ans. These PPIs are issued by an entity for facilitating the purchase of goods and services from that entity only. Cash withdrawals are not permitted. These instruments cannot be used for payment or settlement for third party services. The issuance or operation of such instruments is not classified as a payment system requiring approval / authorisation by RBI and are, therefore, not regulated or supervised by RBI.

8. What are the various types of PPIs ?

Ans. PPIs that require RBI approval / authorisation prior to issuance are classified under two types:

Small PPIs (or minimum-detail PPIs): These PPIs are issued by banks and non-banks after obtaining minimum details of the PPI holder. These PPIs can be used for purchase of goods and services 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. Funds transfer or cash withdrawal from such PPIs is not permitted.
Full-KYC PPIs: The PPIs are issued by banks and non-banks after completing Know Your Customer (KYC) of PPI holder. These PPIs can be used for purchase of goods and services, funds transfer or cash withdrawal.

9. What are the types of Small PPIs ? +

Ans. Small PPIs can be of two types:

PPIs upto ₹10,000/- (with cash loading facility). These PPIs shall be converted into full-KYC PPIs within 24 months.
PPIs upto ₹10,000/- (with no cash loading facility).

10. How can PPIs be loaded ? +

Ans. PPIs can be loaded / reloaded by cash (not permitted in one type of Small PPI), debit to a bank account, credit and debit cards, PPIs (as permitted from time to time) and other payment instruments issued by entities regulated in India and in Indian Rupees (INR) only.