1. Summary
  2. Type of prepaid instruments
    1. Closed system PPIs
    1. Semi-closed system PPIs
      1. Types of Semi-Closed PPIs
    1. Open system PPIs
    1. Authority to Issue PPIs


Prepaid Instrument suppliers (PPI) are mobile operators that problems billfold and this billfold is connected with client‘s Mobile on the receipt of the request by debiting his regular checking account and thru this customer pays Bills, will do looking, purchase picture tickets, etc. options & Characteristics of post-paid Instrument suppliers

  • KYC Norms can apply as per PMLA Act 2002
  • Regulated by Federal Reserve Bank of India below Payment & Settlements Act 0f 2007.
  • GHB Deposit Limit is Rs 50000/- solely.
  • No interest can be paid to customers on deposit quantity in wallets
  • Money cannot be withdrawn from billfold except in a few circumstances.
  • Cash is utilized or debited for any expenses incurred.
  • Dealings fees are applicable for & every dealings. e.g Airtel cash charges 0.5% as commission.

Type of prepaid instruments

Prepaid payment instruments (PPIs) facilitate the acquisition of products and services, as well as money services, remittances, and fund transfers to family and friends against the worth keep on such instruments. These instruments are usually pre-loaded cards and, in some cases, have a pre-defined purpose of payment.

Closed system PPIs

You cannot withdraw money from such varieties of PPIs. These PPIs facilitate in facilitating the acquisition of products and services from that entity solely. Besides, these instruments cannot be used for payments or settlement for third-party services. The provision and operation of such instruments aren’t classified as a payment system and don’t need approval or authorization from the Federal Reserve Bank of India (RBI).

Semi-closed system PPIs

These payment instruments don’t enable you to create a money withdrawal, no matter whether or not they are issued by banks or non-bank establishments. For instance, PPIs like HDFC Bank’s PayZapp and bank of India’s YONO are approved by the financial organization, and non-bank PPIs like Paytm and GPay are approved by tally for the acquisition of products and services, as well as money services, payments, cash transfer, remission facilities, etc. They can unremarkably be used at any merchandiser location that features a specific contract with the establishment to just accept the PPIs as payment instruments.

Types of Semi-Closed PPIs

There are 3 styles of semi-closed PPIs. Reckoning on the sort of the PPI, solely a definite quantity of cash is loaded onto the instrument. They’re as follows:

  1. Minimum detail PPI: This sort of PPI implies that solely the vacant minimum details of the holder of the PPI are obtained. Like solely the name and therefore the range on the holder and no different details like address, pan number, Aadhar range, or checking account details, etc. haven’t been obtained by the PPI establishment. In such a case, the most quantity of cash which will be loaded on the PPI is up to Rs 10,000.
  2. Loading solely from a checking account: Within the case wherever the PPI will solely be loaded via the bank account and not through the other suggests that like money etc. the most quantity of cash which will be loaded onto the PPI is Rs 10,000.
  3. Full KYC PPI: wherever the complete KYC of the PPI holder has been obtained and registered by the PPI establishment the most limit of cash that will be loaded onto the instrument will increase to Rs.1 %.

Open system PPIs

The most ordinarily used PPIs are debit and credit cards. You’ll be able to build a money withdrawal from these PPIs. However, take care whereas retreating money from a MasterCard as a result of by doing, therefore, you may be charged a high rate of interest from the day of money withdrawal. These PPIs issued by banks (approved by the central bank) also can be used at any merchandiser for the acquisition of products and services, as well as money services, remission facilities, etc. Cash withdrawal at ATMs, the purpose of sale terminals and business correspondents is permissible through these PPIs.

Authority to Issue PPIs

With regards to non-banking entities like firms, the wants to be met by them to be eligible to issue PPIs are as follows- – the corporate should be incorporated in India.  The minimum paid capital of the corporate should be over Rs 5% Minimum positive web value should be Rs 1 in any respect times. When it involves banking establishments, all banks that benefit from the eligibility criteria established by the tally are allowed to issue PPIs. However once it involves providing Mobile Banking Transactions, solely banks that are approved by the tally might launch mobile-based PPIs. In the case of Non-Banking money establishments and entities, they’re solely allowed to issue PPIs below the semi-closed or the closed system. This includes mobile-based PPIs. The sole condition to the provision of PPIs by non-banking entities is that they’re needed to take care of written agreement account with any scheduled business banks within the country.

About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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