The Reserve Bank of India (RBI) has approved the collaboration of Prepaid Payment Instruments (PPIs) to increase the account limit to Rs 2 lakh of digital wallets.
This was part of a larger Bank of Monetary Policy Committee (MPC) move announced on April 7.
In a statement in this regard, the RBI stated that this “promotion of the proper use of payment tools (such as cards, wallets)” such as PoS devices, ATMs, QR codes, and toll-free touch centers is still available.
The RBI will promote the migration of PPIs to full KYC by increasing the balance of the remaining PPIs from the current Rs 1 lakh to Rs 2 lakh. It stated that the required regulations would be “issued separately.”
“Even though two years have passed, moving to the full KIs of KYC, so collaboration, is not important. It is therefore proposed that co-operation be enforced on the full KIC PPIs and on all adoption infrastructure, ”the statement read.
The RBI “emphasized the benefits of cooperation between acquisitions and acquisitions,” the statement noted and referred to the Master Direction on Issuance and Operation of PPIs (October 11, 2017), which set the stage for a phased implementation of inter-bank cooperation.
Following this, the guidelines issued in October 2018 empowered collaboration, albeit voluntarily, as long as the PPIs met the Know Your Customer (KYC) requirements.
The response has been positive, payment banks have accepted policy announcements.
Satish Gupta of Paytm Payments Bank acknowledged that the move “would encourage migration to full KIC PPIs and facilitate investment.”
Rishi Gupta, chief executive, Fino Payments Bank called the move “a good step” and praised the regulator for understanding and complying with complaints from paying bank players. However note that “it would be preferable to a limit of Rs 5 lakh.”
In addition to the wallet limit, traditional NEFT and RTGS banking structures were also extended to non-bank paying payers.