Master Direction on Prepaid Payment Instruments (PPI) has been modified by the Reserve Bank of India (RBI) on Friday. This will permit banks and non-bank PPI issuers to provide these instruments for public transit.
"To provide convenience, speed, affordability, and safety of digital modes of payment to commuters for transit services, it has been decided to permit authorized bank and non-bank PPI issuers to issue PPIs for making payments across various public transport systems," stated Reserve Bank of India in a press release.
These instructions will go into effect immediately.
The Master Directions for PPIs were first announced in 2021. It defines PPIs as instruments that allow for the purchase of products and services, financial services, remittance facilities, and so on in exchange for the value stored therein.
PPIs that require RBI approval/authorisation before issuance are divided into two types: minor PPIs and full-KYC PPIs.
Banks and non-banks issue small PPIs after gathering basic information about the PPI holder. These are solely used to purchase goods and services. It is not permitted to move funds or withdraw cash from such PPIs.
On the other hand, Full-KYC PPIs are issued by banks and non-banks once the PPI holder has completed their Know Your Customer (KYC) process. Furthermore, these PPIs can be used to make purchases of goods and services, transfer monies, and withdraw cash. Also to note, the banks and non-banks can issue PPIs after receiving the appropriate RBI permission.
The Reserve Bank of India enabled non-banking PPI issuers to issue e-RUPI vouchers. These vouchers are delivered to a beneficiary's phone by QR code or SMS.
"These measures will make the benefits of the e-RUPI digital voucher available to a broader set of users and further deepen the penetration of digital payments in the country," stated RBI's governor Shaktikanta Das.
