Reserve Bank of India (RBI) on Tuesday introduced a new type of semi-closed prepaid payment instrument (PPI), which can be used only for purchase of goods and services up to a limit of Rs 10,000. Money will be loaded or reloaded in the new PPI only from a bank account for making digital payments such as bill payments, merchant payments, etc. The new PPI could be issued on the basis of essential minimum details sourced from the customer.
The central bank, in its monetary policy statement on December 5, had proposed to introduce a new type of PPI to give impetus to small-value digital payments as well as for enhanced user experience. PPIs have been playing an important role in promoting digital payments and bringing in the new PPI will further facilitate its usage, the RBI had said in a statement accompanying its monetary review.
PPI is as an instrument that facilitates purchase of goods and services, including financial services, remittance facilities, etc., against the value stored on such instruments. Presently, three types of PPIs are issued in the country – closed system PPIs, semi-closed system PPIs and open system PPIs – which can be issued in the form of cards and mobile wallets.
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