In order to meet the transactional needs of the public through digital means, the Reserve Bank has introduced additional measures and enhanced the personal limits for Mobile wallets to 20,000 Rs per month from 10,000. earlier with minimum details. However this limit can be extended to 100000 by providing full KYC documents.
Further ,RBI has also relexed the rules regarding receipt of payment through these mobile wallets. Now merchent can register himself with self declartion and bank account details only and can receive amount up to 50000 per month through mobile wallet.However he can not have more than 20000 in his wallet at a given time.Further merchant can transfer money in wallets to his bank account only.
There are four types of mobile wallets in India – open, semi-open, semi-closed and closed.
- Open Wallets are the ones that allow you to buy good and services, withdraw cash at ATMs or banks and transfer funds. These services can only be jointly launched with a bank. Ex: PayTM, M-Pesa, ICICI etc.
- Semi-Open Wallets, which allows you to transact with merchants that have a contract with then. You can’t withdraw cash or get it back. You’ll have to spend what you load. Ex: Airtel money
- Closed Wallets (not re-loadable with cash and do not permit cash withdrawal) Ex: prepaid and gift vouchers
- Semi-Closed Wallets, which do not permit cash withdrawal or redemption, but allow you to buy goods and services at listed merchants and perform financial services at listed locations. Ex: Mobikwik
The step taken by the RBI is good but it has been limited only till 30.12.2016 subject to review . In our view RBI should not take interim measure but create a long term policy to promote digital payments
Press release by RBI
In order to meet the transactional needs of the public through digital means, the Reserve Bank has introduced additional measures by way of special dispensation for small merchants and enhancement in limits for semi-closed Prepaid Payment Instruments (PPIs).
A special dispensation has now been enabled for small merchants whereby PPIs issuers can issue PPIs to such merchants. While balance in such PPIs cannot exceed ₹ 20,000/- at any point of time, the merchants can transfer funds from such PPIs to their own linked bank accounts upto ₹ 50,000/- per month, without any limit per transaction. Merchants only need to provide a self-declaration in respect of their status and details of their bank account.
The limit of semi-closed PPIs issued with minimum details has been enhanced to ₹ 20,000/- from the existing ₹ 10,000/-. The total value of reloads during any given month has also been enhanced to ₹ 20,000/-.
Extant instructions for other categories of PPIs remain unchanged. Full KYC PPIs with balance upto ₹ 1,00,000/- can continue to be made available by authorised PPI issuers.
The above measures will be effective from November 21, 2016 till December 30, 2016, subject to review.
The earlier PPI guidelines did not specifically provide for opening of PPIs for such merchants as a separate category and the limit for semi-closed PPIs issued with minimum details was ₹ 10,000/-.
Circular by RBI
November 22, 2016
All Prepaid Payment Instrument Issuers,
System Providers, System Participants
and all other Prospective Prepaid Payment Instrument Issuers
Dear Madam / Sir,
Special measures to incentivise Electronic Payments –
(i) Enhancement in issuance limits for Pre-Paid Payment Instruments (PPIs) in India
(ii) Special measures for merchants
Following the withdrawal of legal tender characteristics of existing ₹ 500/- and ₹ 1000/- Bank Notes (Specified Bank Notes – SBN), in order to facilitate the adoption of digital payments, it has been considered necessary to introduce the following special measures in partial modification of Master Circular DPSS.CO.PD.PPI.No.01/02.14.006/2016-17 dated July 01, 2016 on Issuance and Operation of Pre-paid Payment Instruments in India.
(i) Enhancement in PPI limits:
The limit of semi-closed Prepaid Payment Instrument (PPI) that can be issued under Para 7.2 (i) of the Master Circular on issuance and operations of PPIs in India has now been enhanced from ₹ 10,000/- to ₹ 20,000/- .
The total value of reloads during any given month shall also not exceed ₹ 20,000/-
All other extant instructions in this regard shall remain unchanged.
(ii) Special dispensation for merchants:
As per the extant PPI guidelines, merchants are defined as establishments who accept the PPIs issued by PPI issuer against the sale of goods and services. As a special dispensation for small merchants, PPI issuers can now issue PPIs to such merchants subject to the following:
- Merchants shall give a self-declaration in respect of their merchant status and details of their own bank account, which shall be kept on record by the issuer.
- PPIs can be issued to such willing merchants only after due verification and validation of their bank account details.
- Inflows of funds / credit to such PPIs shall emanate only from sale transactions of the merchant.
- While there is no minimum balance requirement, the maximum value in these PPIs shall not exceed ₹ 20,000/- at any point of time.
- Funds transfer from such PPIs are permitted only to the merchant’s own linked bank account and upto an amount of ₹ 50,000/- per month, without any limit per transaction.
- PPI issuers shall clearly identify such PPIs in their systems for the purpose of maintenance of escrow, reporting and MIS requirements.
2. The above measures shall come into effect from the date of this circular and shall be applicable till December 30, 2016, subject to review.
3. The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007, (Act 51 of 2007).
(Nanda S Dave)
Chief General Manager