The RBI said this is to “promote optimal utilisation of payment instruments such as cards, wallets (Image Source: Shutterstock)
The Reserve Bank of India (RBI) has allowed interoperability of Prepaid Payment Instruments (PPIs) and increased account limit to Rs 2 lakh for digital wallets.
These were part of the central bank’s Monetary Policy Committee (MPC) measures announced on April 7.
In a statement regarding the same, RBI said this is to “promote optimal utilisation of payment instruments (like cards, wallets)” as infrastructures such as PoS devices, ATM, QR codes, and bill-payment touch points are still scarce.
The RBI will incentivise the migration of PPIs to full-KYC by increasing the limit of outstanding balance in such PPIs from the current Rs 1 lakh to Rs 2 lakh. It said that necessary instructions “will be issued separately.”
“Despite a passage of two years, migration towards full-KYC PPIs, and therefore interoperability, is not significant. It is, therefore, proposed to make interoperability mandatory for full-KYC PPIs and for all acceptance infrastructure,” the statement read.
RBI has “been stressing the benefits of interoperability amongst issuing and acquiring entities,” the statement noted and pointed to the Master Direction on Issuance and Operation of PPIs (October 11, 2017), which laid down a road-map for a phased implementation of interoperability between banks and non-banks.
After these, the guidelines issued in October 2018 enabled interoperability, albeit on a voluntary basis, insofar as the PPIs were full- Know Your Customer (KYC) requirements.
The reactions have been positive, with payments banks welcoming the policy announcements.
Paytm Payments Bank's Satish Gupta agreed that the move will “incentivise migration to full-KYC PPIs and aid financial inclusion.”
Rishi Gupta, head, Fino Payments Bank called the move “a positive step” and hailed the regulator for understanding and acting upon concerns of payments bank players. He however noted that “a limit of Rs 5 lakh would have been preferred.”
Besides the wallet limit, traditional bank facilities of NEFT and RTGS have also been extended to non-bank payment players.(With inputs from PTI)