The Reserve Bank of India (RBI) introduced a new semi-closed pre-paid instrument (PPI) for mass transit services to help move on from cash-based systems to electronic means. The new instrument will allow users to load Rs 2,000 and have a minimum validity period of six months from the date of issue. "In the process of moving from cash based payments to electronic payments, the migration of micro and small value cash payments can play a significant role in achieving the vision of less-cash society. One such area where a large number of small value cash payments take place relates to mass transit systems," the RBI said in a circular. Some of the other features of the new instrument are: - No cash-out or refund will be permitted from these PPIs. - The instrument can also be used at other merchants whose activities are allied to or are carried on within the premises of the issuing mass transit system. An example: The Delhi Metro could issue a wallet service which can be used to buy food at the food stalls in the station. - The issuer may decide upon the desired level of KYC, if any, for such PPIs - The instrument must have an Automated Fare Collection application related to the transit service. Two open wallets introduced It's worth noting that in December the RBI also introduced two new categories of open system of pre-paid instruments. Open PPIs are instruments which can be used for purchase of goods and services, including financial services like funds…
