Master Directions on Prepaid Payment Instruments (PPIs) (Updated as on December 27, 2024)
UR
- Applies toAll regulated entities
- StatusIn force
- RBI text changedRBI updated this document on September 30, 2026. BankPulse is re-reading it. BankPulse checked all 42 points on this page against RBI's new text on 11 October 2026. Every quoted line is still in RBI's text.
- IssuedAug 27, 2021
- Amendmentsnone tracked
- Length42 points in 3 sections · 5 min read
The four dates on this rule
- PublishedAug 27, 2021The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyAug 27, 2021The day this rule starts to apply, as RBI's own text states it.
- Time to get readyNoneIt starts to apply on the day it was published.
- Last date to actOctober 31, 2021The day by which the work this rule asks for must be finished.
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Numbers to remember
| Rs.5 crore | A non-bank applicant for PPI authorisation needs a minimum positive net-worth of Rs.5 crore. RBI Para 4.5 |
| Rs.15 crore | By the end of the third financial year after authorisation, net-worth must reach Rs.15 crore. RBI Para 4.5 |
| six months | RBI's in-principle approval for a PPI applicant stays valid for six months. RBI Para 5.4 |
| Rs.50,000 | Cash loaded into any PPI is capped at Rs.50,000 per month, within the PPI's overall limit. RBI Para 7.6 |
| Rs.10,000 | Cross-border outward PPI payments are capped at Rs.10,000 per transaction and Rs.50,000 per month. RBI Para 8.1 |
| Rs.1,20,000 | A small cash-loading PPI may take at most Rs.10,000 a month and Rs.1,20,000 in a financial year. RBI Para 9.1 |
| 24 months | A small PPI must be upgraded to full-KYC within 24 months of issue, or lose further credit. RBI Para 9.1 |
| Rs.2,00,000 | A full-KYC PPI may never hold more than Rs.2,00,000 outstanding at any time. RBI Para 9.2 |
| Rs.2,000 | A bank's full-KYC PPI allows PoS cash withdrawal up to Rs.2,000 per transaction and Rs.10,000 a month. RBI Para 9.2 |
| Rs.3,000 | A mass-transit PPI may never hold more than Rs.3,000 outstanding at any time. RBI Para 10.2 |
| one year | Every PPI carries a minimum validity of one year from its last loading or reloading. RBI Para 13.1 |
| three years | A non-bank issuer may not move an expired PPI's balance to Profit & Loss for three years. RBI Para 13.3 |
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Must know
1. No PPI without approval
No entity may set up or run a PPI payment system without RBI's prior approval or authorisation.
2. Bank issuance needs approval
A bank may issue PPIs only after RBI approves it, on top of other RBI eligibility rules.
3. Non-bank issuance needs authorisation
A non-bank entity needs RBI's authorisation, not mere approval, before it may issue PPIs.
4. Rs.5 crore net-worth to apply
A non-bank applicant for PPI authorisation needs a minimum positive net-worth of Rs.5 crore.
5. Rs.15 crore net-worth deadline
By the end of the third financial year after authorisation, net-worth must reach Rs.15 crore.
6. In-principle approval lasts six months
RBI's in-principle approval for a PPI applicant stays valid for six months.
7. Six months to start business
A finally authorised entity must start its PPI business within six months, or the authorisation lapses.
8. PMLA applies to PPI issuers
The Prevention of Money Laundering Act and its rules apply in full to every PPI issuer.
9. Cash loading capped monthly
Cash loaded into any PPI is capped at Rs.50,000 per month, within the PPI's overall limit.
10. Cross-border outward transaction caps
Cross-border outward PPI payments are capped at Rs.10,000 per transaction and Rs.50,000 per month.
11. Cross-border inward remittance cap
Only up to Rs.50,000 from an individual inward MTSS remittance may be loaded into a full-KYC PPI.
12. Small PPI loading caps
A small cash-loading PPI may take at most Rs.10,000 a month and Rs.1,20,000 in a financial year.
13. Small PPI outstanding cap
A small cash-loading PPI may never hold more than Rs.10,000 outstanding at any time.
14. No cash-out or transfer
A small PPI is only for buying goods and services; cash withdrawal and funds transfer are barred.
15. 24 months to upgrade
A small PPI must be upgraded to full-KYC within 24 months of issue, or lose further credit.
16. Full-KYC PPI outstanding cap
A full-KYC PPI may never hold more than Rs.2,00,000 outstanding at any time.
17. Pre-registered beneficiary transfer cap
Funds sent to a pre-registered beneficiary from a full-KYC PPI are capped at Rs.2,00,000 a month.
18. Other beneficiary transfer cap
Transfers to any other beneficiary from a full-KYC PPI are capped at Rs.10,000 a month.
19. Bank PPI cash withdrawal cap
A bank's full-KYC PPI allows PoS cash withdrawal up to Rs.2,000 per transaction and Rs.10,000 a month.
20. Non-bank PPI cash withdrawal cap
A non-bank's full-KYC PPI also allows cash withdrawal up to Rs.2,000 per transaction and Rs.10,000 a month.
21. Gift PPI value cap
A gift PPI may never be loaded with more than Rs.10,000.
22. Transit PPI skips KYC
A mass-transit PPI can be issued without KYC verification of the holder.
23. Transit PPI outstanding cap
A mass-transit PPI may never hold more than Rs.3,000 outstanding at any time.
24. Transit PPI has perpetual validity
A mass-transit PPI has perpetual validity; the usual validity and redemption rules do not apply.
25. Transit PPI bars cash-out
Cash withdrawal, refund and funds transfer are all barred on a mass-transit PPI.
26. PPIs for visiting foreigners
A bank or non-bank may issue INR full-KYC PPIs to foreign nationals and NRIs visiting India.
27. Transit, gift PPIs exempt
A mass-transit PPI is exempt from interoperability; a gift PPI issuer may offer it optionally.
28. Full-KYC interoperability is mandatory
Interoperability through card networks or UPI is mandatory for every full-KYC PPI holder.
29. Escrow can't dip below dues
The escrow balance may never fall, at day's end, below outstanding PPI value plus merchant dues.
30. One-year minimum PPI validity
Every PPI carries a minimum validity of one year from its last loading or reloading.
31. Three-year hold before P&L
A non-bank issuer may not move an expired PPI's balance to Profit & Loss for three years.
32. Ombudsman covers PPI complaints
PPI customers of banks and non-banks can use RBI's Integrated Ombudsman Scheme for grievance redressal.
33. Zero liability for issuer fault
A customer's liability is zero when the non-bank PPI issuer's own fraud or negligence caused the loss.
Do it
1. Ten-year transaction log
A PPI issuer must keep a log of every PPI transaction for at least ten years.
2. Co-branding needs RBI approval
A non-bank PPI issuer needs RBI's one-time approval before it may issue co-branded PPIs.
3. Non-bank issuers need escrow
A non-bank PPI issuer must keep its outstanding balance in an escrow account at a scheduled commercial bank.
4. 45-day expiry warning
A PPI issuer must caution the holder at intervals during the 45 days before expiry.
5. One year idle, then inactive
A PPI unused for one full year is made inactive after a notice to the holder.
6. 48 hours, then 30 days
A PPI issuer should resolve a complaint within 48 hours, and always within 30 days.
7. 10 days to reverse funds
The non-bank PPI issuer must shadow-reverse an unauthorised transaction to the customer's PPI within 10 days of notice.
8. 90 days to resolve liability
A non-bank PPI issuer must resolve a complaint and fix any customer liability within 90 days.
Background
1. Who this MD covers
This Master Direction applies to every entity that issues or operates Prepaid Payment Instruments.