wordpress blog stats
Connect with us

Hi, what are you looking for?

, , ,

Wallets cannot change shareholding till rules on PPIs clarified: RBI


Wallets and other prepaid payment instruments (PPIs) cannot change their ownership or shareholding till it finishes its review of PPI guidelines, according to an RBI circular. 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 PPIs.

“During this period, change in ownership/shareholding of an existing authorised entity would be permitted only where required due to court orders, mergers or amalgamations and/or regulatory exigencies,” the RBI’s circular read.

This may mean that wallets will not be able to raise money through equity funding i.e. raising funding from investors by giving by transferring shares. However, they could possibly raise funding through debt instruments such as non-convertible debentures (NCDs).

Note that the RBI said that the “temporary suspension will not be applicable to applications that may be preferred by the newly licensed Payments banks and Small finance banks.”

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.

KYC problems for wallets 

Advertisement. Scroll to continue reading.

At a recent event, a senior RBI official criticized PPI players over lax KYC norms which led to opacity in movement of funds, as indicated by this PTI report. The RBI said that there were many  instances of wallets being created with minimum KYC without consent of customers. The customer is being identified by his or her mobile number, period. And such wallets have been used for routing money which has been fraudulently taken from bank accounts, the report read. The RBI added that it might come out with guidelines for wallets regarding KYC.

In June, State Bank of India (SBI) removed the option of loading money on all major wallets through net banking due to rising online frauds.

Wallets also are not allowed to be part of the UPI completely. The UPI has not allowed inter-operability functions as “the RBI’s level of comfort of eKYC is not up to the mark in wallets,” NPCI’s CEO AP Hota told MediaNama.

Written By

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



Do we have an enabling system for the National Data Governance Framework Policy (NDGFP) aiming to create a repository of non-personal data?


A viewpoint on why the regulation of cryptocurrencies and crypto exchnages under 2019's E-Commerce Rules puts it in a 'grey area'


India's IT Rules mandate a GAC to address user 'grievances' , but is re-instatement of content removed by a platform a power it should...


There is a need for reconceptualizing personal, non-personal data and the concept of privacy itself for regulators to effectively protect data


Existing consumer protection regulations are not sufficient to cover the extent of protection that a crypto-investor would require.

You May Also Like


Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...


135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...


Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...


By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ