RBI has announced a fresh guideline on the issuance and operation of PPI (Prepaid Payment Instruments). It has also has issued stricter Know Your Customer (KYC) norms for the users of prepaid instrument or mobile wallets.
With these guidelines to complete full KYC formalities, the mobile wallet user can now send-receive money between wallets of different companies and banks seamlessly through Unified Payments Interface (UPI).
The guidelines have come into effect from 12th October 2017 and the PPIs will have to comply with these norms on or before December 31, 2017.
Highlights of RBI guidelines
According to the new guidelines, mobile wallets or PPI, which have been doing a minimum KYC through verification of mobile numbers, will have switch to full KYC wallet within one year of opening it. All existing wallet users have to switch to the full KYC format by this year end.
The minimum KYC wallets cannot have a balance of more than ten thousand rupees, and this can be allowed only for purchase of goods and services and not for remittances to other wallets or bank accounts.
Full KYC wallets will have a limit of one lakh rupees and can avail all facilities for fund transfer.
PPIs cannot be loaded with more than fifty thousand rupees per month.
Why new set of guidelines?
The new norms have been brought in place to detect fraud and prevent fake wallet transactions.
Earlier in the last week, RBI had declared that interoperability amongst KYC compliant PPIs will be executed within 6-months of the date of issuance of the revised guidelines. The same week, it also issued the official guidelines for NBFC-P2P engaged in P2P lending in the country.
RBI issues guidelines for Peer to Peer lending platform
It has also increased the net worth requirements PPI licence. The companies seeking for license require a positive net worth of 5 Cr rupees at the time of application against 2 Cr rupees previously.
This has to be 15 Cr rupees within the 3rd financial year of receiving RBI go ahead.