The Reserve Bank of India in its bi-monthly monetary policy review today put forth a proposal to introduce a new kind of PPI or prepaid payment instrument that can be used for purchasing goods and services worth only up to Rs. 10,000. Such an instrument can be loaded or reloaded only using a bank account and facilitate digital transactions including merchant payments, bill payments etc. The recommendation has been made to boost the use of PPIs.
PPIs play a significant role in boosting digital payments, the RBI said.
PPIs are instruments that enable purchase of goods and services such as financial services, remittance facilities etc. against the value loaded on such instruments. These can be issued as wallets, cards or any such instrument or form that can give access to the PPI and for using the amount therein.
"Such PPIs can be issued on the basis of essential minimum details sourced from the customer. Instructions in this regard will be issued by December 31, 2019," the RBI said.