The Reserve Bank of India is cracking down on risks in the prepaid payments arena with a bold draft framework for Prepaid Payment Instruments (PPIs). Announced on April 25 from the national capital, the ‘Master Directions’ seek to instill greater accountability, protect consumers, and streamline operations for digital wallets and prepaid cards.
Non-bank players must now demonstrate a Rs 5 crore net worth, verified by auditors, to qualify for PPI issuance licenses. This ramps up to Rs 15 crore within three years. Debit card-issuing banks get the green light post-DPSS notification. Critically, all funds collected for PPIs must reside in segregated Rupee Escrow Accounts at Indian commercial banks, shielding customer money from business exigencies.
To curb potential abuse, the draft imposes structured caps: General PPIs max out at Rs 2 lakh balance and Rs 10,000 monthly cash reloads. Low-value variants limit balances to Rs 10,000, while transit-focused ones to Rs 3,000. Forex-linked PPIs permit loads solely via cash or equivalent forex receipts, with outflows not exceeding Rs 5 lakh per month.
User empowerment takes center stage through mandatory disclosures. Before issuance, providers must explain all aspects—charges, duration, rules—in accessible language across English, Hindi, and regional tongues. Transaction glitches demand immediate refunds, overriding balance limits if needed.
Stakeholders have until May 22, 2026, to submit comments. This proactive stance from RBI underscores its commitment to a resilient digital economy, where safety doesn’t compromise speed or convenience. As fintech thrives, these guardrails could redefine trust in everyday digital spends.
