The Reserve Bank of India (RBI) on Wednesday used a carrot and stick approach towards prepaid payment instruments (PPI) issuers when it doubled the maximum balance that their customers can hold. However, it made interoperability mandatory for such entities.
Interoperability means an user of a particular wallet can transfer funds to another user (of another operator) without any difficulty.
RBI governor Shaktikanta Das said PPIs were given the option to become interoperable in 2018 in cases where a full know your customer (KYC) validation is done.
“Even after two years, migration towards full-KYC PPIs, and, therefore, interoperability, is not significant. It is, therefore, proposed to make interoperability mandatory for full-KYC PPIs,” Das said.
He added that to incentivise the migration of PPIs to full-KYC, the limit of outstanding balance in such PPIs may be raised from the current Rs 1 lakh to Rs 2 lakh.
Das said the RBI has been stressing on interoperability to optimally utilise the payment instruments such as cards and wallets. If a full KYC is done by a non-bank PPI, the RBI also permits cash withdrawal by their customers, subject to a limit.
The RBI said PPIs can now also use facilities such as RTGS and NEFT. So far this was only applicable to banks and few specialised entities.
