RBI permits prepaid wallets, cards for public transports without KYC

RBI today notified Amendment to Master Direction on Prepaid Payment Instruments.  As per the revised guidelines, the various types of PPIs that banks and non-banks can issue after obtaining necessary approval/authorisation from RBI.

“Public transport systems across the country cater to a multitude of commuters daily. To provide convenience, speed, affordability, and safety of digital modes of payment to commuters for transit services, it has been decided to permit authorised bank and non-bank PPI issuers to issue PPIs for making payments across various public transport systems” RBI said.

 Features of PPIs for Mass Transit Systems (PPI-MTS)

• Banks / non-banks are permitted to issue such PPIs;
• Such PPIs shall contain the Automated Fare Collection application related to transit services, toll collection, and parking;
• Such PPIs shall be enabled only for payments across various modes of public transport such as metro, buses, rail, & waterways, tolls and parking;
• These PPIs can be issued without KYC verification of the holders;
• These PPI can be reloadable;
• The amount outstanding, in such PPIs shall not exceed Rs.3,000/- at any point in time;
• These PPIs can have perpetual validity, i.e., the provisions of validity and redemption given in Section 13* of this MD shall not apply to PPI-MTS; and Cash-withdrawal, refund, or funds transfer shall not be permitted in such PPIs.

* [As per Section 13 of MD, the PPI issuer shall caution the PPI holder at reasonable intervals, during the 45 days before expiry of the validity period of the PPI. The caution advice shall be sent by SMS/e-mail / any other means in the language preferred by the holder indicated at the time of issuance of the PPI.]

 PPIs to Foreign Nationals / Non-Resident Indians (NRIs) visiting India

Banks / Non-banks permitted to issue PPIs can issue INR-denominated full-KYC PPIs to foreign nationals / NRIs visiting India (to start with, this facility will be extended to travellers from the G-20 countries, arriving at select international airports). Such PPIs can also be issued in a co-branding arrangement with entities authorised to deal in Foreign Exchange under FEMA;

1. The PPIs shall be issued after physical verification of the Passport and Visa of the customers at the point of issuance. The PPI issuers shall ensure that such information and records thereof are maintained with them;
2. The PPIs can be issued in the form of wallets linked to UPI and can be used for merchant payments (P2M) only;
3. Loading / Reloading of such PPIs shall be against receipt of foreign exchange by cash or through any payment instrument;
4. The conversion to Indian Rupee shall be carried out only by entities authorised to deal in Foreign Exchange under FEMA;
5. The amount outstanding at any point of time in such PPIs shall not exceed the limit applicable on full-KYC PPIs;
6. The unutilised balances in such PPIs can be encashed in foreign currency or transferred ‘back to source’ (payment source from where the PPI was loaded), in compliance with foreign exchange regulations;

Validity and redemption:

All PPIs issued in the country shall have a minimum validity period of one year from the date of last loading/reloading in the PPI. PPIs can be issued with a longer validity as well. In the case of PPIs issued in the form of a card (with a validity period mentioned on the card), the customer shall have the option to seek a replacement of the card. The holders of PPIs shall be permitted to redeem the outstanding balance in the PPI if for any reason the scheme is being wound up or is directed by RBI to be discontinued.