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To give impetus to small value digital payments, the Reserve Bank of India (RBI) said that Prepaid Payment Instrument (PPI) issuers can launch a new type of ‘semi-closed PPI’, whereby the amount loaded in these instruments can be up to ₹10,000 during any month, and the total amount loaded during the financial year can be up to ₹1.20 lakh.
These PPIs — which can be issued by bank and non-bank PPI issuers after obtaining minimum details of the PPI holder — should be reloadable in nature, and issued in either card or electronic form. Loading/reloading can be only from a bank account.
“The amount outstanding at any point of time in such PPIs shall not exceed ₹10,000. These PPIs shall be used only for purchase of goods and services, and not for funds transfer,” the RBI said in a circular issued to PPI issuers.
PPIs are instruments that facilitate purchase of goods and services, including financial services, remittance facilities, etc., against the value stored on such instruments.
Semi-closed PPIs are issued by banks and non-banks 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.
As per the circular, PPI issuers shall provide an option to close the PPI at any time, and also allow to transfer the funds ‘back to source’ (i.e., the payment source from where the PPI was loaded) at the time of closure.
The features of such PPIs shall be clearly communicated to the PPI holder by SMS/e-mail/post or by any other means at the time of issuance of the PPI/before the first loading of funds, it added.
The minimum detail PPIs existing as on the date of this circular (issued on December 24) can be converted to the new type of PPI, if desired by the PPI holder.
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