RBI TO INTRODUCE NEW PPI FOR ONLINE TRANSACTIONS OF UP TO RS 10,000

The Reserve Bank of India (RBI) has proposed to introduce a new type of Prepaid Payment Instrument (PPI) that can only be used for online transactions up to Rs 10,000. RBI also said that it will issue steps to improve the safety of ATM's by the end of this month.

In its statement on developmental and regulatory policies, RBI said these PPI's can be issued on the basis of essential minimum details sourced from the customer and can only be used to make digital payments.

Further instructions on this regard will be issued by December 31, 2019, the regulatory body said.

What are PPIs?

A PPI is an instrument that facilitates payments with the money stored on it. Three types of PPIs are being issued in India: closed system PPIs, semi-closed system PPIs and open system PPIs.

Gift cards would come under closed system while Paytm, Mobikwik etc are semi-closed. An open system PPI would be debit cards, credit cards or travel cards.

To issue semi-closed and open system PPIs, banks need to get approval from RBI. A closed system PPI does not require any such approval.