The Reserve Bank of India said that it will be reviewing guidelines for prepaid payment instruments (like mobile wallets and prepaid cash cards) in India. The review will be finished by December 31st 2016 (this year), and for the time being, the RBI has suspended the processing of fresh applications for prepaid payment instruments.
At the moment, there are 47 non-bank entities and 45 banks operating in the payments space. Most recently, payment gateway aggregator PayU got a semi-closed prepaid wallet licence from the RBI. Following PayU’s acquisition of Citrus Pay, Citrus Pay said it would be surrendering its semi-closed wallet licence. Note that the RBI also has issued norms for companies who wish to surrender their prepaid payment instruments.
In July, Chennai-based Yeldi Softcom got a semi-closed wallet licence from the RBI. Yeldi is a payment services company that uses NFC technology to deliver its services. Last year include Eko India Financial Services, Card Pro Solutions and Paul Fincap Private Limited. In September 2015, mobile VAS and Internet products company Spice Digital launched a mobile wallet called SpiceMudra which would focus on domestic remittances.
Payments bank guidelines
Separately, the RBI said that it would be finalizing operating guidelines for payments banks this week. Paytm has said that it will be commencing its payments bank operations by Diwali.
The department of posts’ payments bank will be called India Post Payments Bank (IPPB). The entity will commence commercial operations by September 2017 and get an approval from the Reserve Bank of India (RBI) by March 2017.
Airtel said it will be launching its payments bank business by the second quarter of the financial year ending March 2017.
Tech Mahindra, Cholamandalam Investment and Finance company and Sun Pharma promoter Dilip Shanghvi surrendered their payments bank licence earlier this year. Dilip Shangvi had partnered with IDFC Bank and telecom operator Telenor to start a payments bank. RBI had permitted 11 entities to start a payments bank and the list is down to eight.