The Reserve Bank of India (RBI), the central bank of the country, has released a draft Master Direction on Prepaid Payment Instruments (PPIs) and proposed measures to strengthen the country’s digital payments framework.
The draft is intended to support long-term growth in PPIs, with a focus on transaction security and clearer rules for refunds and grievance redressal.
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
PPIs are instruments where funds are loaded in advance and then used for subsequent transactions. The RBI categorises PPIs as general purpose PPIs, gift PPIs, transit PPIs, PPIs for non-resident Indians (NRIs), and other specific purpose PPIs.
The draft follows the RBI’s comprehensive review of existing guidelines, part of its efforts to create a more conducive PPI framework with enhanced transaction security.
It has invited comments and feedback from regulated entities, members of the public and other stakeholders.
Comments are invited by 22 May 2026, The Economic Times reported citing PTI.
Under the draft, banks permitted by the RBI to issue debit cards can issue PPIs, with prior intimation to the Department of Payment and Settlement Systems (DPSS), Central Office, RBI, Mumbai. Non-bank entities can also issue PPIs after authorisation from the RBI.
For general purpose PPIs, the RBI proposed that the outstanding amount should not exceed Rs 200,000 ($2,125) at any point in time. It also proposed that cash loading should be capped at Rs 10,000 per month.
The draft said the maximum value of a gift PPI should not exceed Rs 10,000. For transit PPIs, it proposed a cap of Rs 3,000.
The draft proposes that a PPI wallet may be issued to foreign nationals and NRIs after physical verification of passport and visa, to enable Person to Merchant (P2M) payments during their stay in India.
On refunds, the draft said that refunds for failed, returned, rejected or cancelled transactions should be applied to the respective PPI immediately. This would apply even if the refund causes the PPI balance to exceed the prescribed limits for that category.
However, the draft added that refunds of transactions done using any other payment instrument would not be credited to a PPI.
The RBI proposed that PPI issuers should facilitate interoperability through a card network or the Unified Payments Interface (UPI) on the issuer side for holders of Full-KYC PPIs, subject to conditions set by the relevant network provider.
The draft also proposes that PPI issuers should disclose all PPI features, associated charges, validity period, and terms and conditions in clear and simple language.
It said this should preferably be provided in English, Hindi and the local language at the time of issuance.
