In a bid to boost prepaid payment instruments (PPIs) for commuting, RBI has introduced a new category of prepaid payment instruments that will be issued by the mass transit operators (such as metro or road transport).
The PPI- MTS (mass transit systems) will necessarily contain the Automated Fare Collection application related to the transit service and can be used at other merchants whose activities are allied to or are carried on within the premises of the transit system only,” RBI said in the draft circular, which will be open to comments and feedback.
With a minimum validity of six months from the issue date, the PPI- MTS will be reloadable with a balance limit of Rs. 2,000. No cash-out or refund will be permitted from these PPI, the central bank said.
At present, for other PPIs the RBI has permitted to issue cards with balance of up to Rs. 1 lakh.
The issuer of the PPI may decide upon the desired level of KYC, if any, for such PPIs and will ensure on-boarding of merchants whose activities are allied to or are carried on within the premises of the transit system only.
In addition, funds transfer under Domestic Money Transfer (DMT) will also not be applicable to these PPIs. All other extant guidelines for escrow arrangement, customer grievance redressal mechanism, agent / merchant due diligence, reporting and MIS requirements, etc. would be applicable, the draft circular said.
RBI said it has been receiving requests from various segments, including providers of mass transit services, such as, metro train and road transport services, indicating the need for PPIs catering to the requirements of this segment to enhance commuter convenience.
“It was felt that a separate category of semi-closed PPI for mass transit systems which handle a large number of small value cash payments will facilitate the migration to electronic payments in line with the country’s vision of moving to a less-cash society,” RBI added.
Source : Thehindubusinessline