Date: 2021-05-19Category: Not ApplicableState: Union GovernmentCountry: India
Prepaid Payment Instruments (PPIs) – (i) Mandating Interoperability; (ii) Increasing the Limit to ₹2 lakh for Full-KYC PPIs; and (iii) Permitting Cash Withdrawal from Full-KYC PPIs of Non-Bank PPI Issuers
Executive Summary:
This document from the Reserve Bank of India (RBI) mandates interoperability for Prepaid Payment Instruments (PPIs), increases the limit for full-KYC PPIs to ₹2 lakh, and permits cash withdrawals from full-KYC PPIs issued by non-bank PPI issuers. PPI issuers must enable interoperability by March 31, 2022. The Master Direction on Issuance and Operation of PPIs is being modified to reflect these changes.
Key Points / Main Content:
Interoperability of PPIs:
* PPI issuers must provide interoperability for full-KYC PPIs through authorized card networks (for cards) and UPI (for electronic wallets).
* Interoperability is mandatory on the acceptance side.
* Deadline for enabling interoperability: March 31, 2022.
* PPIs for Mass Transit Systems (PPIMTS) are exempt from interoperability; gift PPI issuers have the option to offer it.
Full-KYC PPI Limit Increase:
* The maximum outstanding amount for full-KYC PPIs is increased to ₹2 lakh.
* All other conditions under paragraphs 9.1 ii and 9.2 of the Master Direction on PPIs dated October 11, 2017, remain applicable.
Cash Withdrawal from Non-Bank PPIs:
* Cash withdrawal is permitted for full-KYC PPIs issued by non-bank PPI issuers.
* Maximum withdrawal limit: ₹2,000 per transaction, with an overall limit of ₹10,000 per month per PPI.
* All cash withdrawal transactions require Additional Factor of Authentication (AFA/PIN).
* PPI issuers must establish customer redressal mechanisms, subject to ombudsman schemes and instructions on limiting customer liability.
* PPI issuers must implement a cooling period for cash withdrawals after opening or reloading PPIs to mitigate fraud.
Rationalization of Cash Withdrawal Limits for Debit Cards and Open System Prepaid Cards:
* Cash withdrawal limit from PoS terminals using debit cards and open system prepaid cards issued by banks is rationalized to ₹2,000 per transaction, within an overall monthly limit of ₹10,000 across all locations (Tier 1 to 6 centers).
* The requirement of data submission to RBI mentioned at paragraph 6 of the circular DPSS.CO.PD.No.44902.14.003201516 dated August 27, 2015, has been dispensed with.
Impact Analysis:
Bank and Non-Bank Prepaid Payment Instrument Issuers:
* Impact: Must implement mandatory interoperability for full-KYC PPIs, adhere to the increased limit of ₹2 lakh, and, if a non-bank issuer, enable cash withdrawal features with specified limits and security measures.
* Action Required: Upgrade systems to support interoperability, adjust limits for full-KYC PPIs, implement cash withdrawal functionality (if applicable), and establish customer redressal mechanisms.
System Providers and System Participants:
* Impact: Required to facilitate interoperability through authorized card networks and UPI.
* Action Required: Modify systems to ensure seamless interoperability and support the revised transaction limits.
PPI Holders:
* Impact: Benefit from increased PPI limits (₹2 lakh) and the ability to withdraw cash from non-bank PPIs (full-KYC), along with enhanced interoperability.
* Action Required: Be aware of the new limits and cash withdrawal features, and utilize customer redressal mechanisms if needed.
Key Entities Referenced
Reserve Bank of India: The central bank of India, the issuing authority of the notification.
Prepaid Payment Instruments (PPIs): A method to facilitate purchase of goods and services against the value stored on such instruments.
Full-KYC PPIs: Prepaid Payment Instruments that have completed Know Your Customer (KYC) verification.
Master Direction DPSS.CO.PD.No.116402.14.0062017 18: A set of guidelines issued by the Reserve Bank of India regarding the issuance and operation of Prepaid Payment Instruments (PPIs).
Unified Payments Interface (UPI): An instant real-time payment system developed by National Payments Corporation of India (NPCI).
Payment and Settlement Systems Act, 2007: An act of the Indian Parliament that provides for the regulation and supervision of payment systems in India.
Mumbai, Maharashtra: Location of the Central Office of the Department of Payment and Settlement Systems, Reserve Bank of India.
P. Vasudevan: Chief General Manager, Reserve Bank of India, signing the notification.
भारतीय �रज़वर् बक�
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2021-22/40
DPSS.CO.PD.No.S-99/02.14.006/2021-22 May 19, 2021
All Bank and Non-Bank Prepaid Payment Instrument Issuers,
System Providers and System Participants
Madam / Dear Sir,
Prepaid Payment Instruments (PPIs) –
(i) Mandating Interoperability;
(ii) Increasing the Limit to ₹2 lakh for Full-KYC PPIs; and
(iii) Permitting Cash Withdrawal from Full-KYC PPIs of Non-Bank PPI Issuers
This has reference to paragraphs 10 and 11 of the Statement on Developmental and
Regulatory Policies dated April 07, 2021 wherein it was announced that (a) PPI interoperability
shall be made mandatory, (b) the limit for full-KYC PPIs shall be increased from ₹1 lakh to ₹2
lakh, and (c) cash withdrawal shall be permitted using full-KYC PPIs of non-bank PPI issuers.
2. A reference is also invited to the Master Direction DPSS.CO.PD.No.1164/02.14.006/2017-
18 dated October 11, 2017 on Issuance and Operation of PPIs (as amended from time to time)
and Circular DPSS.CO.PD.No.808/02.14.006/2018-19 dated October 16, 2018 on PPIs –
Guidelines for Interoperability.
3. Accordingly, the following are advised –
i. It shall be mandatory for PPI issuers to give the holders of full-KYC PPIs (KYC-
compliant PPIs) interoperability through authorised card networks (for PPIs in the form
of cards) and UPI (for PPIs in the form of electronic wallets);
ii. Interoperability shall be mandatory on the acceptance side as well;
iii. The interoperability shall be enabled by March 31, 2022; and
iv. PPIs for Mass Transit Systems (PPI-MTS) shall remain exempted from interoperability
while Gift PPI issuers have the option to offer interoperability.
भुगतान और िनपटान �णाली िवभाग, क��ीयकायार्लय, 14वीमंिजल, क��ीयकायार्लयभवन,शहीदभगत�संहमाग,र् फोटर्, मम्ुबई - 400001
फोनTel: (91-22) 2264 4995; फैक् सFax: (91-22) 22691557; ईमेल-e-mail : cgmdpssco@rbi.org.in
Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, ShahidBhagat Singh Road, Fort, Mumbai -
400001
�हदं ी आसानह,ै इसका�योगबढ़ाइए4. The maximum amount outstanding in respect of full-KYC PPIs (KYC-compliant PPIs) has
been increased from ₹1 lakh to ₹2 lakh. All other conditions mentioned under paragraphs 9.1
(ii) and 9.2 of the Master Direction on PPIs dated October 11, 2017 shall continue to be
applicable.
5. The feature of cash withdrawal shall be permitted in respect of full-KYC PPIs issued by non-
bank PPI issuers as well. The following conditions shall, however, be applicable –
i. Maximum limit of ₹2,000 per transaction with an overall limit of ₹10,000 per month per
PPI;
ii. All cash withdrawal transactions performed using a card / wallet, shall be authenticated
by an Additional Factor of Authentication (AFA) / PIN;
iii. Any PPI issuer offering this facility shall put in place proper customer redressal
mechanisms. Complaints in this regard shall fall under the ambit of the respective
ombudsmen schemes and instructions on limiting liability of customers; and
iv. PPI issuers shall put in place suitable cooling period for cash withdrawal upon opening
the PPIs or loading / re-loading of funds into PPIs to mitigate the risk of fraudulent use
of PPIs.
6. The cash withdrawal limit from Points of Sale (PoS) terminals using debit cards and open
system prepaid cards issued by banks in India advised vide circular
DPSS.CO.PD.No.449/02.14.003/2015-16 dated August 27, 2015 has also been rationalised
to ₹2,000 per transaction within an overall monthly limit of ₹10,000 across all locations (Tier 1
to 6 centres). The requirement of submission of data to RBI mentioned at paragraph 6 of the
circular has been dispensed with. All other provisions shall, however, continue to be
applicable.
7. The Master Direction on Issuance and Operation of PPIs dated October 11, 2017 (as
amended from time to time) is being modified to reflect the above.
8. These instructions are issued under Section 18 read with Section 10(2) of the Payment and
Settlement Systems Act, 2007.
Yours faithfully,
(P. Vasudevan)
Chief General Manager