New Delhi: For the convenience of customers, The Reserve Bank of India (RBI) on Tuesday introduced a new type of prepaid payment instrument (PPI) which could be used only for the purchase of goods and services up to a limit of Rs 10,000.
“To give impetus to small value digital payments and for enhanced user experience, it has been decided to introduce a new type of semi-closed PPI…,” RBI said in a circular on Tuesday.
What are PPIs and what are its features?
1.PPIs are financial instruments that facilitate the purchase of goods and services against the value stored on such instruments.
2. Such PPIs shall be issued by bank and non-bank ‘PPI Issuers’ after obtaining minimum details of the holder.
3. The minimum details will necessarily include a mobile number verified with one-time pin (OTP) and a self-declaration of name and unique identity/identification number.
4. The amount outstanding at any point of time in such PPIs should not exceed Rs 10,000, RBI said, adding these PPIs will be used only for the purchase of goods and services and not for funds transfer.
5.The instrument issuers will provide an option to close the PPI at any time and also allow to transfer the funds back to the source (payment source from where the PPI was loaded) at the time of closure
6. There are currently three kinds of PPIs allowed by RBI-closed system, semi-closed and open PPIs.