RBI’s PPI-MTS Guidelines: Overview

RBI’s PPI-MTS Guidelines: Overview

Question: RBI has placed the final guidelines on Prepaid Payment Instruments for Mass Transit System on its website. Provide an overview of the PPI for MTS.

- RBI has released the final guidelines for the Prepaid Payment Instruments for Mass Transit System enabling the issuance of a separate category of semi-closed prepaid instruments for mass transit system

- This is in line with combating black money in a cashless society

- PPI-MTS will enhance commuter convenience and facilitate migration to electronic payments

- It will be used within the mass transit systems

- PPI-MTS will have a minimum validity of 6 months from date of issue

- These PPIs will be reloadable instruments subject to outstanding limit of INR 2000 at any point

- Apart from the mass transit system, PPI-MTS can also be used at other merchants allied with the transit system

- Moving from cash based to electronic payments, migration of micro and small value cash payments will play a major role in attaining cashless society

- The semi-closed PPIs will be issued by Mass Transit System Operator following authorisation under the Payment and Settlement Systems Act 2007 to issue and operate semi-closed PPIs

- PPI-MTS will contain the Automated Fare Collection application pertaining to transit service to qualify as PPI-MTS

- The PPI-MTS will ensure on boarding of merchants permitted following due procedure applied to any other PPI issuer

- Issuer may decide upon desired KYC level for PPIs

- PPI-MTS issued must at no point of time exceed its stipulated value

- No cash out or refund is permitted from PPIs

- Fund transfer under DMT guidelines will not be applicable to these PPIs

- All other extant guidelines such as those for escrow arrangement, customer grievance redressal mechanism, agent/merchant due diligence,reporting and MIS requirements applicable to PPIs will be applied for PPI-MTS as well

Facts and Stats

- Guidelines will be reviewed keeping two factors in mind namely convenience and security

- New category of semi-closed PPIs has been introduced based on requests received from various segments such as providers of mass transit services such as road and metro

- Separate category of semi closed PPI for mass transit system will handle a large number of small value cash payments and facilitate migration to electronic payments in line with moving towards cashless society