Introduction of Prepaid Payment Instruments for Mas Transit System

Introduction of Prepaid Payment Instruments for Mas Transit System

Reserve Bank of India (RBI) vide its circular dated 9^th July, 2015 introduced a new category of semi-closed Prepaid Payment Instrument (PPI) with the following features:-

·         The semi-closed PPIs will be issued by the mass transit system operator (PPI-MTS) after authorization under the Payment and Settlement Systems Act, 2007 to issue and operate such semi-closed PPIs;;;;;;;;;;;;;;;;;;

·         The PPI-MTS will necessarily contain the Automated Fare Collection application related to the transit service to qualify as PPI-MTS;;;;;;;;;;;;;;;;;;

·         Apart from the mass transit system, such PPI-MTS can be used only at other merchants whose activities are allied to or are carried on within the premises of the transit system;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;

·         The PPI-MTS issuer will ensure on-boarding of merchants (only those permissible as under (iii) above) 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 KYC, if any, for such PPIs;

·         The PPI-MTS issued may be reloadable in nature and at no point of time the value/balance n PPI can exceed the limit of Rs. 2000/-;;;;;;;;;;;;;;;;;;;;;

·         No cash-out or refund will be permitted from these PPIs;;;;;;;;;;;;;;;;;;;;;;

·         Funds transfer under the Domestic Money Transfer (DMT) guidelines will also not be applicable to these PPIs;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;

·         All other extant guidelines for escrow arrangement, customer grievance redressal mechanism, agent/merchant due diligence, reporting and MIS requirements etc applicable to issue of PPIs would continue to be applicable in respect of PPI-MTS...............................................

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today(24-07-2015)..........