The Reserve Bank of India () is working on a revised framework for Prepaid Payment Instruments (PPIs), the system behind digital wallets and prepaid cards. On Wednesday, the apex bank proposed a set of measures aimed at supporting their long-term growth, which include steps to strengthen transaction security, along with clearer rules on refunds and and grievance redressal.
PPI is a payment instrument where money is loaded in advance and then used for facilitating subsequent transactions, These include categories such as general purposed PPI, gift PPI, transit PPI, and PPIs for non-resident Indians (NRIs), covering commonly used facilities such as mobile wallets and other prepaid tools.
Speaking of the proposed revisions, the central bank said the objective is to build “a conducive framework for long-term growth of PPIs with enhanced security of transactions,” while improving customer protection and system efficiency.
Accordingly, a draft Master Direction on Prepaid Payment Instruments was issued, and comments were invited by May 22, 2026.
Who can issue PPIs?
The draft said banks permitted by RBI to issue debit cards can also issue PPIs after informing the Department of Payment and Settlement Systems (DPSS), at its central office in Mumbai. Meanwhile, non-bank entities can issue PPIs only after authorisation from the RBI.
“A non-bank applicant shall have a minimum net-worth of ₹5 crore, and shall submit a certificate…from its statutory auditor,” the draft said.
Further, a non-bank PPI issuer should attain a minimum net-worth of ₹15 crore by the end of the third financial year of authorisation.
RBI proposes a cap on wallet balances
The draft proposes category-wise limits to ensure that users use it in an efficient and controlled manner. Here are the details:
- General purpose PPI: RBI proposed that the amount outstanding in such cases should not exceed ₹2 lakh at any point of time. Cash loading in general purpose PPI may be restricted to ₹10,000 per month.
- Gift PPI: The draft said the maximum value of such a PPI may be capped at ₹10,000 and in case of transit PPI, it may be capped at ₹3,000.
Additionally, a PPI wallet may be issued to or NRIs, after physical verification of Passport and Visa, which will help in making person to merchant (P2M) payments during their stay in India. “Loading of such PPI shall be against receipt of foreign exchange by cash or through any payment instrument. Total amount debited from such PPI during any month shall not exceed ₹5 lakh,” the RBI’s draft read.
What happens in case of failed transactions?
The draft said refunds in case of failed, returned, rejected, or cancelled transactions should be applied to the respective PPI immediately, even if such refunds result in exceeding the prescribed limits for that specific PPI category.
Though refunds of transactions done using any other payment instrument would not be credited to PPI, according to the draft.
It also proposes that PPI issuers must clearly disclose all features, associated charges, validity period and terms and conditions to users at the time of issuance, using simple language, preferably in English, Hindi and the local language. Through this measure, RBI has placed strong emphasis on transparency and grievance handling.
RBI bars agents from charging extra fees
Agents of the PPI issuer are not allowed to impose any charges on the customers, the proposal added. The draft also proposed measures for limiting liability of customers in case of an unauthorised PPI .
The proposal also said a non-bank PPI issuer must keep the funds collected against issuance of PPIs in a separate escrow account, maintained in Indian rupees with a commercial bank in India.