Close on the heels of issuing new guidelines for payments banks, the Reserve Bank of India has relaxed some of its norms for pre-paid instruments (PPI) and also introduced new categories of PPIs which can be issued by banks. The amendments to existing guidelines will apply to the semi-closed category of instruments. Semi-closed instruments are those which can be used for purchase of goods and services, including financial services at a group of clearly identified merchant locations/ establishments which have a specific contract with the issuer to accept the payment instruments. These instruments do not permit cash withdrawal or redemption by the holder. Some major changes: 1. Wallet limit increased, Gift Cards valid for longer For semi-closed PPIs with full KYC. the limits have been raised from Rs 50,000 to Rs 1,00,000. The balance in the PPI should not exceed Rs. 1,00,000/- at any point of time. Gift cards' validity has been enhanced from one year to three years. Other provisions of PPI guidelines with respect to Gift Cards will continue to be applicable. 2. Banks can now issue Prepaid Wallets that allow cash withdrawals The RBI also decided to allow 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 transfer at any card accepting merchant locations (point of sale terminals) and also permit cash withdrawal at ATMs / BCs. 3. Prepaid wallets for family members from a single bank account allowed Such PPIs…
