RBI Proposes New Rules for Digital Wallets and Prepaid Payment Instruments, Seeks Suggestions Till May 22

The Reserve Bank of India (RBI) has released a draft framework for Prepaid Payment Instruments (PPI), including digital wallets and prepaid cards, aimed at strengthening transaction security and improving rules related to refunds and grievance redressal.

The central bank has invited public suggestions and feedback on the proposed regulations until May 22.

PPI refers to payment instruments where money is loaded in advance and later used for purchases or transactions. These include categories such as General Purpose PPI, Gift PPI, Transit PPI (for travel), PPI for NRIs, and other special-purpose PPIs.

According to the draft, any bank authorized by the RBI to issue debit cards can also issue PPIs by informing the Payment and Settlement Systems Department (DPSS) of the RBI. Non-banking entities can also issue PPIs after obtaining prior approval from the RBI.

For General Purpose PPI, such as e-wallets, the RBI has proposed that the maximum outstanding balance should not exceed ₹2 lakh at any given time. Additionally, cash loading into such wallets will be capped at ₹10,000 per month.

The proposed framework is expected to enhance transparency, improve customer protection, and strengthen trust in India’s growing digital payments ecosystem.

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