The Reserve Bank of India on 28 May 2015 proposed to introduce Prepaid Payment Instruments (PPI) for Mass Transit System (PPI-MTS).
These PPI-MTS will be semi-closed instruments that will be used facilitate the migration to electronic payments in line with the country’s vision of moving to a less-cash society.
Further, it can also be used within the mass transit systems and will have a minimum validity of six months from date of issue. Such PPIs will be reloadable instruments subjected to an outstanding limit of 2000 rupees at any point of time.
Main features of Prepaid Payment Instruments (PPIs)
• The semi-closed PPIs will be issued by the mass transit system operator (PPI- MTS) who will be authorised under the Payment and Settlement Systems Act, 2007.
• The PPI- MTS will necessarily contain the Automated Fare Collection application related to the transit service.
• Such PPI-MTS can be used by other merchants whose activities are allied to or are carried on within the premises of the transit system only.
• The PPI- MTS issuer will ensure on-boarding of merchants following due procedure applicable to any other PPI issuer.
• The PPI-MTS will have minimum validity of six months from the date of issue.
• The issuer may decide upon the desired level of Know Your Customer (KYC), if any, for such PPIs.
• No cash-out or refund will be permitted from these PPIs.
• Funds transfer under Domestic Money Transfer (DMT) will also not be applicable to these PPIs.
The RBI proposed to introduce PPIs after it received requests from various segments, including providers of mass transit services and road transport services, indicating the need for PPIs catering to the requirements of this segment to enhance commuter convenience.
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When: 28 May 2015