What changed
RBI amended the 2009 PPI guidelines to allow semi-closed PPIs to be used for air/rail travel tickets (in addition to utility bills/essential services). Banks can now issue semi-closed PPIs through agents (not only business correspondents), subject to conditions like cash sale limit of Rs 5,000 per customer. Co-branded PPIs are now permitted, and separate guidelines were issued for gift PPIs, government/institutional PPIs, and MTSS-linked PPIs.
What it means for you
Banks and non-bank PPI issuers can now offer semi-closed PPIs for travel ticketing, expanding use cases and customer appeal. The agent channel (non-BC) allows wider distribution without full BC infrastructure, but issuers bear full principal liability for agent actions. Co-branded PPIs open partnership opportunities with merchants, while new categories (gift, government, MTSS) create niche products. Cash loading limits at agents (Rs 5,000) and KYC-light limits (Rs 10,000 for utility/travel PPIs) remain key compliance points.
What you must do
- Update PPI product terms to include air/rail travel ticketing for semi-closed instruments.
- Review agent appointment processes to ensure due diligence and principal liability coverage.
- Implement cash loading limits of Rs 5,000 per customer at agent locations for semi-closed PPIs.
- Develop co-branded PPI partnerships with merchants, ensuring compliance with RBI guidelines.
- Prepare separate operational frameworks for gift PPIs, government/institutional PPIs, and MTSS-linked PPIs.
Who it affects
Banks issuing prepaid payment instruments, Non-bank PPI issuers (system providers/participants), Agents and business correspondents of PPI issuers, Merchants and co-branding partners, Government organizations and financial institutions issuing PPIs, Money transfer service scheme (MTSS) operators
Can semi-closed PPIs now be used for travel ticket purchases?
Yes, RBI amended para 6.4(iii) to include air/rail travel tickets as permissible payments, along with utility bills and essential services, up to a limit of Rs 10,000 without separate KYC.
What are the conditions for banks issuing semi-closed PPIs through agents?
Banks can use agents (non-BCs) for issuance/reloading, subject to: due diligence of agents, principal liability for all agent acts, cash sale limit of Rs 5,000 per customer, and for utility/travel PPIs, a total limit of Rs 10,000 per customer.
Are co-branded prepaid instruments now allowed?
Yes, the circular permits issuance of co-branded prepaid payment instruments, opening partnership opportunities with merchants and other entities.