RBI

Special measures to incentivise Electronic Payments-Enhancement in issuance limits for PPIs, Special measures for merchants

Special measures to incentivise Electronic Payments-Enhancement in issuance limits for Pre-Paid Payment Instruments (PPIs), Special measures for merchants

Reserve Bank of India

Special measures to incentivise Electronic Payments – (i) Enhancement in issuance limits for Pre-Paid Payment Instruments (PPIs) in India (ii) Special measures for merchants

RBI/2016-17/150
DPSS.CO.PD.No.1288/02.14.006/2016-17

November 22, 2016

All Prepaid Payment Instrument Issuers,
System Providers, System Participants
and all other Prospective Prepaid Payment Instrument Issuers

Dear Madam / Sir,

Special measures to incentivise Electronic Payments –
(i) Enhancement in issuance limits for Pre-Paid Payment Instruments (PPIs) in India
(ii) Special measures for merchants

Following the withdrawal of legal tender characteristics of existing ₹ 500/- and ₹ 1000/- Bank Notes (Specified Bank Notes – SBN), in order to facilitate the adoption of digital payments, it has been considered necessary to introduce the following special measures in partial modification of Master Circular DPSS.CO.PD.PPI.No.01/02.14.006/2016-17 dated July 01, 2016 on Issuance and Operation of Pre-paid Payment Instruments in India.

(i) Enhancement in PPI limits:

  1. The limit of semi-closed Prepaid Payment Instrument (PPI) that can be issued under Para 7.2 (i) of the Master Circular on issuance and operations of PPIs in India has now been enhanced from ₹ 10,000/- to ₹ 20,000/- .
  2. The total value of reloads during any given month shall also not exceed ₹ 20,000/-
  3. All other extant instructions in this regard shall remain unchanged.

(ii) Special dispensation for merchants:

As per the extant PPI guidelines, merchants are defined as establishments who accept the PPIs issued by PPI issuer against the sale of goods and services. As a special dispensation for small merchants, PPI issuers can now issue PPIs to such merchants subject to the following:

  1. Merchants shall give a self-declaration in respect of their merchant status and details of their own bank account, which shall be kept on record by the issuer.
  2. PPIs can be issued to such willing merchants only after due verification and validation of their bank account details.
  3. Inflows of funds / credit to such PPIs shall emanate only from sale transactions of the merchant.
  4. While there is no minimum balance requirement, the maximum value in these PPIs shall not exceed ₹ 20,000/- at any point of time.
  5. Funds transfer from such PPIs are permitted only to the merchant’s own linked bank account and upto an amount of ₹ 50,000/- per month, without any limit per transaction.
  6. PPI issuers shall clearly identify such PPIs in their systems for the purpose of maintenance of escrow, reporting and MIS requirements.

2. The above measures shall come into effect from the date of this circular and shall be applicable till December 30, 2016, subject to review.

3. The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007, (Act 51 of 2007).

Yours faithfully

(Nanda S Dave)
Chief General Manager

Share

Recent Posts

  • Income Tax

Non issue of notice u/s 143(2) for even belated ITR filed u/s 148 makes assessment void ab initio

Non issuance of notice u/s 143(2) for return filed u/s 148 even though belatedly, makes the assessment framed bad in…

4 days ago
  • Insurance

Calculation of functional disability depends on victim’s earning capacity in open market – SC

Calculation of functional disability depends on assessing the victim’s earning capacity in the open, competitive market – Supreme Court In…

5 days ago
  • Income Tax

Appeal against ITAT shall lie only before High Court within whose jurisdiction AO is situated

Appeal against every decision of ITAT shall lie only before the High Court within whose jurisdiction the Assessing Officer who…

6 days ago
  • Excise/Custom

SC recommends action against Customs Officer who relied upon AI generated fake case laws

Supreme Court recommends action against Commissioner of Customs who relied upon non-existent AI generated case laws. Supreme Court recommends action…

7 days ago
  • Income Tax

Non- payment of cost imposed can’t trigger automatic confirmation of an invalid exparte assessment.

ITAT power to pass such orders "as it thinks fit" implies a judicial discretion to be exercised within the parameters…

1 week ago
  • Income Tax

Non-deduction of TDS does not make transaction as unexplained in the hands of deductee – ITAT

Mere non-deduction of TDS by the deductor on a transaction does not change the character of the transaction to make…

2 weeks ago