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With the advent of digital technology, a lot of organizations have come up with innovative solutions and offerings to cater to the financial requirements of individuals and organizations globally. The last decade has witnessed an upsurge in new financial instruments being established and adopted at an exponential rate, be it bringing retail and institutional broking, currencies, and commodities trading to the tips via Zerodha or adding another payment mode for the users via UPI payments (Unified payments interface).

Prepaid Payments Instrument (PPI) is one such offering that enables instrument holders to perform monetary transactions against the value stored or loaded in/on such instruments. A simple example of such an instrument can be the meal card which can be used to buy, say, a taco from the food outlet. A fintech often collaborates with the financial institution and the technology service provider, such as Zeta, to tailor these products and services.

With multiple parties being involved and actual money being moved across banks, it, hence, becomes imperative for the regulatory bodies to lay down a certain set of instructions or guidelines that a financial or a non-financial institution that intends to distribute the financial instrument/product has to comply with in order to ensure the safety of the end-users and prevent any fraudulent or illegal activities. On the same note, the regulatory body in India- the Reserve Bank of India (RBI) had documented the list of such rules and instructions in its Master Direction on Issuance and Operation of Prepaid Payment Instruments dated August 27, 2021.

This document entails the latest guidelines from the RBI that these parties- fintech, bank (also referred to as PPI issuer) and the technological service providers, shall keep in mind when operating any such financial instrument.

GLOSSARY GLOSSARY GLOSSARY GLOSSARY GLOSSARY GLOSSARY

GLOSSARY GLOSSARY GLOSSARY GLOSSARY GLOSSARY GLOSSARY

Holder
A holder (also referred to as PPI holder) is the individual/organization to whom the prepaid payment instrument is issued.
Merchants
These are specific establishments that can accept the payment instrument, either directly or indirectly through the payment gateway or aggregator, as per the respective contract in place with the PPI issuer and agent.
Know Your Customer (KYC)
KYC are guidelines that require the issuer and/or the agent to vet the applicant for the legitimacy of the details provided via the government-issued identity documents
Loading
Adding an amount to the PPI through the bank account, credit card, or debit card, is referred to as loading money in the PPI.
Unauthorized Transaction
A transaction that went through without the prior approval of the PPI holder due to any fraud, loss, theft or system error, is referred to as an unauthorized transaction
Issuer
Issuer, here, refers to an institution– RBI approved banking institution or RBI licensed non-banking institutions, that can issue a prepaid payment instrument(PPI). As per the RBI guidelines, only the said institutions can issue the PPIs
Prepaid Payment Instrument
Abbreviated as PPI, prepaid payment instruments are the instruments that enable the holder to perform monetary transactions against the value stored or loaded in/on such instruments.
PPI Agent
PPI agent is generally referred to as the organization that ties up with the Issuer to be able to deliver the PPI based product, as by rules laid down by the RBI, only the RBI approved banking institution or RBI licensed non-banking institutions can issue the PPIs.
Transaction
A transaction refers to an exchange of goods, services, or financial assets between the two parties, commonly referred to as buyer and seller. In the context of PPI, a transaction signifies the transfer of an amount from the PPI (wallet/card/account) to the merchant or other intermediary against the purchase of any goods or services.

PPI Categories

Gift PPI

Gift instruments are non-reloadable PPIs issued by the banking and non-banking entities as authorised by the RBI with a minimum validity of a year. It can have a maximum balance value of INR 10,000/- and has no provision to reload, cash-out, or transfer funds. For such PPIs, the issuer shall maintain the proper KYC details of the purchaser of the instrument, though, a separate KYC of the receiver against whose bank account the debit has been made, is not required

Small PPIs: PPIs upto Rs.10,000/

As the name suggests, this is a type of the Small PPI with a limit of Rs. 10,000, i.e.

Total amount loaded/month ≤ 10,000
Total amount loaded year ≤ 1,20,000
Total account balance at any time ≤ 10,000
Total amount debited/month ≤ 10,000

There shall be no separate limit for purchase of goods and services using PPIs. These reloadable PPIs are used for the purchase of goods and services from the merchant sites, as permitted by the issuer- bank or non-bank.
Each user with a particular contact number and unique identification detail shall be issued this type of PPI only once.
Within 24 months of the issuance, the customer shall complete the KYC. On completion, the customer shall be moved to a KYC compliant full kyc PPI. On failing to complete the KYC, the customer shall be suspended from initiating any more credits to the instrument and can only utilize the remaining balance amount. The PPI closure requests from the holder can be proceeeded with the ‘back to source account’(payment source from where the PPI was loaded) route or can be transferred to a bank account after complying with KYC requirements of PPI holder.

(with cash loading facility): These PPIs shall be issued only in electronic form.
(without cash loading facility):

  • Issuancce can be in both or either card or electronic form
  • Loading/Reloading shall be from a bank account/credit card/full-KYC PPI

Full KYC PPIs

Full KYC PPIs are subject to the complete KYC of the PPI holder for the issuance by a bank or non-bank entity. The KYC shall be per the directive laid out by the RBI as laid out in the Customer Verification section. One of the suggested method for the same is Video KYC.
Further, the PPI holders shall be able to create and manage beneficiaries on their respective full kyc PPI accounts.

These reloadable PPIs can be issued in the electronic form only, with the following conditions:

Total account balance at any time ≤ 2,00,000

**Fund Transfer limit/month:**
-Pre-registered Beneficiary≤ 2,00,000 per beneficiary
-Other cases ≤ Rs.10,000

**Cash withdrawals are permitted as:**
For Bank-issued PPIs:
- Limit per transaction: 2,000/-
- Monthly limit: 10,000/- across all locations[Tier1 to 6]

Non-bank issued PPIs:
- Limit per transaction: 2,000/-
- Monthly limit: Rs. 10,000/- across all channels [agents, ATMs, PoS devices, etc.]

PPIs for Mass Transit Systems (PPI-MTS)

Mass transit system refers to the public shared transportation system such as train, bus, ferry, that is used for commuting.

Under the Prepaid Payment Instrument (PPI) guidelines 2015, RBI introduced PPI-MTS that can be issued by the authorised mass transit system operators abide by the Payment and Settlement System Act (PSS Act, 2007), to facilitate customer convenience during travel in the public transport, in line with the ‘journey to a cashless society through digital banking’. It can be used by the customer at the mass transit systems and the merchants whose activities are related or are within the premise of the MTS. Such PPIs are reloadable but non-refundable, non-transferable and have no provision for cash-outs.

Side Note: Interoperability

Interoperability is the technical compatibility that enables a payment system to be used in conjunction with other payment systems.
For wallet PPIs: interoperability across PPIs shall be enabled through UPI.
For card PPIs (physical or virtual): the cards shall be affiliated to the authorised card networks.

Feature Small KYC PPIs Full KYC PPIs Gift PPI PPIs for Mass Transit
Systems
KYC Detail - Verified mobile number via One Time Pin (OTP)
- Self-declaration of name
- Unique identification number of any of the ‘officially valid documents’ (OVD) like Aadhaar, PAN, passport number.		 Full KYC as per Customer Verification section - Verified mobile number via One Time Pin (OTP)
- Self-declaration of name
- Unique identification number of any of the ‘officially valid documents’ (OVD) like Aadhaar, PAN, passport number.
Separate KYC would not be required for customers who are issued such instruments against debit to their bank accounts and/or credit cards in India.
KYC details of the purchasers of such instruments shall be maintained by the PPI Issuer.		 Not mandatory.
The issuer can decide the KYC details as required by them as per the board approved policy of the issuer
Issuer Banking institutions approved by the RBI or non-banking institutions authorised by the RBI Banking institutions approved by the RBI or non-banking institutions authorised by the RBI Banking institutions approved by the RBI or non-banking institutions authorised by the RBI Authorised mass transit system operators (MTSO), like DMRC, with an automated fare collection application, i.e. automated version of the manual fare collection system, under the PSS Act
Maximum Balance Limit (in INR) 10,000/- 2,00,000/- 10,000/- 3,000/-
Reloadable Reloadable Reloadable Reloadable Reloadable
Credit Limits to PPI (in INR) Monthly: 10,000/-
Annualy: 1,20,000/-		 No Limit Not allowed No limit
Refundability Back to source or PPI holder’s bank account(only after complying with KYC requirements holder) Back to source or PPI holder’s bank account(only after complying with KYC requirements holder) Only back to source Not allowed
Fund-transfers Not Allowed Allowed with limits.
For each beneficiary: 2,00,000/- per month
For other cases: 10,000/- per month		 Not allowed Not allowed
Debit/Transaction Limits (in INR) Monthly: 10,000/-
[Allowed only for listed set of merchants]		 __ Not set Not set
Cash Withdrawals Not Allowed *Bank-issued PPIs:*
Monthly: 2,000/- per transaction and overall 10,000/- across all locations
*Non-bank issued PPIs:*
Monthly: Rs. 2,000/- per transaction and overall monthly limit of 10,000/- per PPI across all channels (agents, ATMs, PoS devices, etc.)		 Not allowed Not allowed
Validity Period The KYC shall be completed within 24 months from the date of issue, to convert it to Full KYC PPI. On failing to do so, the customer can not make any further credit to the instrument but can continue using the balance amount left in the card. - Validity period of one year or more from the date of last loading/reloading in the PPI, as per the Board approved policy of the issuer
- Valid till the expiry date in case validity period is mentioned on the card		 As per the Board approved policy of the issuer for the PPI The validity period of one year or more from the date of last loading/reloading in the PPI, as per the Board approved policy of the issuer
Interoperatability Optional Mandatory Optional Not required

Verification Verification Verification Verification Verification Verification

Verification Verification Verification Verification Verification Verification

Know your Customer (KYC), Anti-Money Laundering (AML) and Combating Financial Terrorism (CFT) are certain guidelines that are released and revised by the Directorate of Banking Regulation (DBR) from time to time to safeguard the banking and non-banking institutions from any fraud or threat.

PPI issuers shall follow the below-mentioned guidelines released by the GOI.

CFT

To keep a track of the source of money and ensure that no illegal transactions are being held, the RBI has mandated the PPI issuers to abide by the following

  • PPI issuer shall keep a log of every transaction pertaining to the PPI for the last 10 years at the minimum. This data shall be made available for scrutiny to RBI or any other agency / agencies as may be advised by RBI.

  • PPI issuer shall file all the Suspicious Transaction Reports (STRs) to Financial Intelligence Unit-India (FIU-IND). A suspicious transaction can be any transaction for which the issuer has apprehension or mistrust considering its unusual nature or circumstances, or the person or group of persons involved in the transaction.

  • PPI issuer shall share the data with the RBI or relevant authorities/agencies authorised by them for scrutiny as and when asked for.

KYC

  • RBI has listed the relevant documents that can be referred to by the issuer for the applying individual/private limited company/sole proprietorship/limited liability partnership/partnership, to ascertain the basic details furnished by them.

  • The issuer shall abide by the Master Direction – Know Your Customer (KYC) Directions 2016 laid by the RBI.

AML

  • PPI issuer shall also file Suspicious Transaction Reports (STRs) to Financial Intelligence Unit-India (FIU-IND)

  • PPI issuer shall incorporate the guidelines as entailed in the AML guidelines under Prevention of Money Laundering Act (PMLA), 2002 that is updated time to time by the RBI to prevent any money laundering related risks.

Min-KYC (Perpetual) Full
Mobile number verification Yes Yes
Officially Valid Documents (OVD) Self-declaration As per the bank’s policy
Expiry Perpetual As specified by Issuer
Maximum Balance
(in INR)		 Shall not exceed 10,000 at any time Shall not exceed 1,00,000 at any time
Amount Credit Limit
(in INR)		 Monthly: 10,000/-
Annually: 1,20,000/-		 As per the bank’s policy
Transaction/Debit Limit (in INR) No limit As per the bank’s policy

Eligibility

Eligibility Eligibility Eligibility Eligibility Eligibility Eligibility Eligibility

Banks

Banks that meet the eligibility criteria shall be permitted to issue semi-closed and open system PPIs, after obtaining approval from RBI.

Non Banks

Non-bank entities which meet the eligibility criteria shall be permitted to issue only semi-closed system PPIs, after obtaining authorization from RBI. Non-bank entities shall have a minimum positive net-worth of Rs. 5 crores as per the latest audited balance sheet at the time of submitting the application. Thereafter, by the end of the third financial year from the date of receiving final authorisation, the entity shall achieve a minimum positive net-worth of Rs. 15 crores which shall be maintained at all times.

Issuance and Limits

Limits

Product Category Gift instruments Semi-closed PPIs - upto ₹ 10,000 Semi-closed PPIs - upto ₹ 100,000 Open system PPIs after completing KYC of the PPI holder
Is the product/offering approved by IFI? Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
KYC Profile of User User KYC Not required KYC Shortfall KYC Expired Minimum KYC Paper KYC Aadhar Biometric Aadhar OTP Paper KYC Aadhar Biometric Aadhar OTP
Max Balance - ₹10,000 ₹10,000 ₹10,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000
Per Txn total credits ₹10,000 - - ₹10,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000
Daily total credits - - - ₹10,000 ₹2,00,000 ₹2,00,000 ₹2,00,000 ₹2,00,000 ₹2,00,000 ₹2,00,000
Monthly total credits - - - ₹10,000 ₹6,50,000 ₹6,50,000 ₹2,00,000 ₹6,50,000 ₹6,50,000 ₹2,00,000
Annually total credits - - - ₹1,00,000 ₹10,00,000 ₹10,00,000 ₹2,00,000 ₹10,00,000 ₹10,00,000 ₹2,00,000
Per Txn total debits No limit ₹10,000 ₹10,000 ₹10,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000
Daily total debits No limit ₹10,000 ₹10,000 ₹10,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000 ₹1,00,000
Monthly total debits No limit ₹10,000 ₹10,000 ₹10,000 ₹6,50,000 ₹6,50,000 ₹2,00,000 ₹6,50,000 ₹6,50,000 ₹2,00,000
Annually total debits No limit ₹1,20,000 ₹1,20,000 ₹1,20,000 ₹10,00,000 ₹10,00,000 ₹2,00,000 ₹10,00,000 ₹10,00,000 ₹2,00,000

Privilege

Product Category Gift instruments Semi-closed PPIs - upto ₹ 10,000 Semi-closed PPIs - upto ₹ 100,000 Open system PPIs after completing KYC of the PPI holder
Max PPI per user NA 1 1 1 1 1 1 1 1 1
KYC Profile of User User KYC Not required KYC Shortfall KYC Expired Minimum KYC Paper KYC Aadhar Biometric Aadhar OTP Paper KYC Aadhar Biometric Aadhar OTP
Can be loaded (credit to the user)? Yes No No Yes Yes Yes Yes Yes Yes Yes
Can be reloaded (credit to the user)? No No No Yes Yes Yes Yes Yes Yes Yes
Can users do ATM withdrawal? No No No No No No No Yes Yes Yes
Can users do a bank transfer? No No No No Yes Yes Yes Yes Yes Yes
Can users send money via P2P? No No No No Yes Yes Yes Yes Yes Yes
Can users receive money via P2P? No No No Yes Yes Yes Yes Yes Yes Yes

Validity/ Redemption

Validity
Minimum one-year validity is mandatory for all PPIs. Issuers can issue PPIs with more than one-year of validity.

Note: Prior to 45 days to the expiry of PPI, PPI Issuers have to caution the PPI holder through SMS/email/post or any other means of communication.
Transfer Outstanding Balance
Non-bank PPI issuers can not transfer the outstanding balance to their profit and loss account, at least 3 years from the date of expiry of PPI. In case the PPI holder approaches the PPI issuer for a refund of such amount, at any time after the expiry date of PPI, then the same shall be paid to the PPI holder in a bank account.

Note: PPIs with no financial transaction for a consecutive period of one year shall be made inactive by the PPI issuers after sending a notice to the PPI holder/s

Transaction Limits

Refunds

  • For the failed/returned /rejected/canceled transactions, refunds will be processed to the respective PPI if the debit was from the PP. These refunds will be processed even though the refund would exceed the balance/transaction limits prescribed for the PPI.
  • In case the debit has been made from another payment instrument, the refunds will not be processed to the PPI.

Cash Withdrawal

In open system PPIs, cash withdrawal at Point of Sale (POS) terminals shall be permitted upto a limit of Rs.2000/- per day in rural areas and Rs.1000/- per day in other areas. The same conditions will apply for cash withdrawals with debit cards, apply to open system PPIs.

Cross Border Transaction

Outward transactions

Reloadable semi-closed and open system PPIs can be issued for cross-border outward transactions subject to the following conditions:
  • Can be issued by banks having AD-I license only at the explicit request of the PPI holders.
  • Can be used only for permissible current account transactions under FEMA (Foreign Exchange Management Act) viz. purchase of goods and services.
  • Cardholders must be KYC compliant.
  • If PPI is in card form, then it must be EMV Chip and PIN compliant.
Transactions not allowed
Any cross-border outward fund transfer and/or for making remittances under the Liberalised Remittance Scheme.

Prefunding online merchant’s accounts using such Rupee denominated PPIs
Transactions limits
Per transaction limit not exceeding Rs.10,000/-

Per month limit shall not exceed Rs. 50,000/-

Inward transactions

Reloadable PPIs can be issued for credit towards cross-border inward remittances subject to the following conditions:
  • PPIs can be issued by Bank and non-bank PPI issuers, who are Indian agents of the authorised overseas principal to beneficiaries of inward remittance under the Money Transfer Service Scheme (MTSS) of the RBI.
  • Cardholders must be KYC compliant.
  • Can be issued only in electronic form, including cards.
  • Must adhere to extant norms under the MTSS Guidelines issued by Foreign Exchange Department, RBI.
Transaction Limits:

Amounts only up to Rs.50,000/- from individual inward MTSS remittance shall be permitted to be loaded/reloaded in PPIs issued to beneficiaries.

Amount in excess of Rs.50,000/- shall be paid by credit to a bank account of the beneficiary.

Note: Entities authorised under FEMA to issue foreign exchange denominated PPIs shall be outside the purview of this Prepaid Compliance documentation.

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Co-branding Co-branding Co-branding Co-branding Co-branding Co-branding

Co-branding Co-branding Co-branding Co-branding Co-branding Co-branding

Co-branding refers to the collaboration between the banks, non-bank entities, and/or privately held entities, here, to deliver the prepaid payment instruments to the users. Generally, a privately held entity or non-bank entity might not have required licenses and authorizations to issue PPI under their program. In such cases, they can enter an arrangement with the licensed organisation such as banks, i.e. co-branding, to be able to provide these services further.

Here the PPI issuer can be a bank or a non-bank entity that is authorized by RBI to issue the PPIs, while the co-branding partner is responsible for marketing and distribution of the PPIs, and providing access to the PPI holder to the services that are offered.

Eligibility

The participating organizations shall be companies incorporated in India and registered under the Companies Act 1956 / Companies Act 2013. In case the party is a bank, then it must be licensed by the Reserve Bank of India (RBI)

If one of the participating parties is a financial institution, then it must have the approval of its regulator for entering into the arrangement.

Any non-bank entity that wishes to be a PPI issuer shall take the respective permissions from DPSS, RBI, Central Office. This is one-time permission and need not be taken separately for each arrangement

Co-branding arrangement guidelines

PPI issuer shall run due diligence on the respective co-branding partner to guard themselves against any possible reputation risk.

The PPI issuer will be liable for all the activities of the co-branding partner, including the customer-related aspect of the program.

Each instrument shall have the PPI issuer’s name prominently visible, whether on the card, online portal, or physical documents. The issuer can have their logo or entity name branded with the co-branding partner’s logo.

Co-branding agreement between the parties shall be as per the board-approved policies of the PPI issuer.

The agreement shall clearly address the roles and responsibilities of each party, obligations, and various risks associated with the arrangement including but not limited to the reputation risk along with the relevant risk mitigation measures.

The agreement shall clearly mention who will be the PPI issuer amongst the participating entities. The PPI issuer shall ensure that the rules and regulations are being complied with as in circular-DBOD.No.FSD.BC.67/24.01.019/2012-13. The below table indicates who will be the PPI issuer in different arrangements
Participating Entity 1 Participating Entity 1 PPI Issuer
Non-bank Non-bank Either of the two
Non-bank Bank Bank
Bank Bank Either of the two

Grievance Redressal

RBI has mandated all the PPI issuers to follow strict policies and TATs w.r.t. to customer grievances, in order to ensure customer protection. The guidelines are laid out with the purview of the PPI issuer, i.e. Bank, and the customer, i.e. the PPI Holder. The fintech, technology service provider (here, Zeta), and the bank, shall work in tandem to ensure that all the guidelines are duly followed.
As a general practice, the PPI issuer, i.e. Bank, should:

Publish Terms and Conditions

PPI holder shall disclose all the terms and conditions, including but not limited to charges, fees, and expiration, pertaining to the PPI in clear and simple language (preferably, English Hindi and the local language) at the time of issuance.

Sensitize on Safe Practices

PPI holder shall be made cognizant of the safe practices of using the respective PPI including the steps to be followed in case of loss or theft

Follow Grievance Redressal Framework

Each issuer shall have a grievance/complaint resolution procedure in place to act on a complaint swiftly through a well laid-out escalation matrix within the specified resolution time.

Grievance Redressal Framework

Each PPI issuer shall have a grievance redressal mechanism in place as per the below guidelines:

Complaint Facility

A complaint facility portal shall be accessible to the PPI holders over the website or mobile application. Upon receiving the complaint, the holder shall be sent the complaint number and shall be shared the updates on the complaint on the registered contact number or email address. The facility shall record the time and date of delivery of the message and receipt of the customer’s response if any. The user shall be able to track the status of his complaint on the portal.

Language

The communication shall be in English, Hindi, and/or local language

Signage and escalation matrix

PPI agents shall share the proper signage of the PPI issuer and the customer care contact number. PPI issuer shall display the contact details of the customer care through different channels, including but not limited to web portals, documents shared with the holder at the time of onboarding. The details shall also include the information on the nodal officers, escalation matrix, and authorized/designated agents

Turn Around Time

PPI issuer shall initiate the action on the complaint within 48 hours of receipt.

Resolution Time

PPI issuer shall resolve the complaint within 30 days from the date of receipt.

If the resolution or the process of determination of the customer liability exceeds 90 days from the date of complaint registration, then the customer shall be compensated for as in Determining Customer Liability.

Amount Reversal

The amount shall be credited to the PPI account within 10 days, irrespective of any breach to the reversal breaches the maximum permissible limit applicable to that type/category of PPI, in case of any reported unauthorized payment.

Transaction alerts

For every payment made through the PPI, the holder shall be sent the payment details along with the complaint number/email address that can be reached out by them in case the payment is unauthorized.

Determining Customer Liability

As an issuing entity, it is the onus of the PPI issuer to prove customer liability in case of unauthorized electronic payment transactions. RBI has laid down the responsibility for each of the probable cases as listed in the following sections, in the case of the bank as the issuer.

No Customer Liability

Negligence or fraud on the part of the bank, irrespective of the fact whether the holder has reported the incident or not
The customer has reported an unauthorized transaction that happened neither due to the negligence of the bank nor that of the holder, but due to some issue in the system or a third-party breach, within 3 working days of the incident

Limited Customer Liability

In case the customer reports the unauthorized transaction after 4 to 7 working days of the transaction communication from the bank, the liability is of the customer for the transaction value or INR 10,000, whichever is less

Complete Customer Liability

Unreported customer negligence, such as sharing the account credentials, leading to unauthorized/fraudulent transactions.

In case the customer reports the activity related to unauthorized/fraudulent transaction after 7 working days of transaction communication by the bank, then the customer liability is determined as per the board approved policy of the bank

Note: The PPI issuer can choose to waive off the losses occurring from the unauthorized electronic payment transactions even in cases of customer negligence.

FAQs

    What all documents are required for KYC in minimum detail PPI? 
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    Minimum detail PPI required below details for KYC:
    a. Contact number of the customer, verified by the one-time password (OTP)
    b. Officially valid documents (OVD) like passport, driving licence, voters’ ID card, PAN card, Aadhaar card and Job Card issued by NREGA signed by a State Government official.

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    What happens if a customer requests to close their minimum detail PPI? 
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    Customers can request the closure of their PPI anytime in the life cycle, upon which the outstanding balance shall be transferred back to the verified bank account of the holder or back to the source account of loading, as chosen by the customer.

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    Can a customer have multiple minimum detail PPI? 
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    No. A customer with the same contact number and the same KYC details, can’t have more than one PPI of this type.

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    What happens if the customer doesn’t verify the KYC within 24 months of issuance for a minimum detail PPI 
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    Any further credit to the instrument shall be denied, although the customer can still use the balance in the card.

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    Can a customer transfer an amount to another PPI holder in minimum detail PPI? 
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    No, PPI to PPI transfer for the same or other user is not permissible under the program

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    What happens when the customer verifies the KYC within 24 months of issuance of minimum detail PPI? 
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    Upon verification, the PPI is moved from minimum detail PPI to KYC compliant semi-closed PPI. It will then, have the following changes:
    a. Maximum Account Balance: INR 1,00,000/-
    b. Beneficiaries: Customer can set up their beneficiaries, including but not limited to by providing their bank account details, details of the PPIs issued by the same issuer (or different issuers as and when permitted
    c. Fund Transfer: The PPI will support fund transfer from PPI to the bank account or to the payment source from which PPI was loaded. Additionally, funds can also be transferred to the ‘pre-registered beneficiaries’ with a limit of INR 1,00,000/- per month per beneficiary. Fund transfer for all other cases is INR 10,000/- per month.

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    What happens if the Gift Instrument expires and has an outstanding balance? 
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    This is determined by the bank’s policy for the payment instrument. Generally, either of the below 2 options are kept in purview:
    a. If a customer is able to identify himself as the actual beneficiary, then s/he can be issued a new card
    b. Balance amount is remitted back to the original source

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    Is there a limit on gift instruments to be issued by the issuer from RBI? 
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    RBI has set no limit on the number of gift instruments to be issued by the issuer. However, it is advised that the issuing entities should adopt a risk-based approach that is duly approved by their Board- the number of instruments to be issued to a customer, transaction limits, etc.

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    Is there a transaction limit for gift instruments? 
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    RBI has set no transaction limit on gift instruments. However, it is advised that the issuing entities should adopt a risk-based approach that is duly approved by their Board- the number of instruments to be issued to a customer, transaction limits, etc.

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    How does an organization qualify for being a PPI-MTS issuer? 
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    RBI mandates an organization to be a mass transit service operator well equipped with an automated fare collection system to be able to apply for authorization with RBI

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    What all KYC details are required to issue PPI-MTS? 
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    No details are required for issuing PPI-MTS. However, the issuing entity may collect relevant details as per their board policy for the issuer

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    What all communications are mandated by the RBI for the instruments? 
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    a. An issuer shall communicate features of PPIs to the customer by SMS/e-mail/post or by any other means at the time of issuance of the PPI or before the first loading of funds.
    b. An issuer shall communicate to the customer of the upcoming expiry date of the instrument along with the next steps at least 45 days before the expiry.

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    What is the expiry for PPI? 
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    Minimum one-year expiry, there is no cap on maximum validity of PPIs.

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    What will happen if the grievance is not resolved within the stipulated resolution time as laid out in the board-approved policy by the non-bank PPI issuer? 
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    In case the non-bank PPI issuer is unable to resolve the complaint or determine the customer liability, if any, within 90 days, the amount as prescribed in Determining customer liability shall be paid to the customer, irrespective of whether the negligence is on the part of customer or otherwise.

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    Is this redressal framework applicable to PPI-MTS as well? 
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    No, this redressal framework is not applicable for PPI-MTS, except, for the fact that the customer liability in case of loss arising due to contributory fraud/negligence/deficiency on the part of the non-bank PPI issuer, is zero.

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    Who shall be responsible to present the proof in case of any disputed/unauthorized transaction? 
      </div>

    The burden of proof to prove the customer liability is mandated to be on the bank in case of any dispute

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    Is there any reporting mechanism to be followed by the PPI issuers? 
      </div>

    Yes, the bank shall report the grievances entailing the respective statuses and summary, on a quarterly basis (by the 10th of the month) to the DPSS, Mumbai Regional Office, RBI, and regional office of DPSS, Mumbai Regional Office, RBI respectively.

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    When does a customer have liability for unauthorized transactions? 
      </div>

    Customer will only have the liability when there is a delay of 4 working days or more in reporting an unauthorized transaction that happened due to any third party breach or some system issue, instead of any fault from the customer or the issuer’s end, as below:

    • Within 4 to 7 working days: Transaction value or ₹10,000/- per transaction, whichever is lower

    • Beyond 7 working days: As per the Board approved policy of the non-bank PPI issuer
      Refer to Determining customer liability for more details

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