RBI draft norms recast PPI rules, tighten limits and interoperability
April 22, 2026
RBI proposes new PPI norms to tighten risk controls, enable interoperability with UPI and cards, and streamline wallet classification
RBI proposes new PPI norms to tighten risk controls, enable interoperability with UPI and cards, and streamline wallet classification
The proposed framework aligns regulation of PPIs with the KYC norms issued in 2025 | (Photo:PTI)
Ajinkya Kawale Mumbai
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The Reserve Bank of India (RBI) has proposed a revamp of regulations governing prepaid payment instruments (PPIs) as the central bank looks to tighten risk controls, promote interoperability and reframe classification for such instruments.
The banking regulator has sought the industry’s comments on the draft master directions on PPIs by May 22 this year. It would replace PPI norms issued in 2021.
The RBI has outlined a new classification of these instruments; general purpose PPIs and special purpose PPIs. It added that use of PPI for cross-border transactions was not permitted.
General purpose ones would include Full-KYC (Know Your Customer) PPIs and Small PPIs. Special purpose PPIs include those for use cases such as gifting, transit and PPIs for foreign nationals or non-resident Indians.
A full KYC PPI is issued after completion of customer due diligence according to latest KYC norms and such instruments have a minimum validity of one year from issuance date.
These would come with limits; amount outstanding should not exceed ₹2 lakh, peer-to-peer (P2P) transfers are capped at ₹25,000 per month and cash loading is permitted to ₹10,000 in a month.
Small PPIs are issued on obtaining minimum customer details such as mobile number verified with an One Time Password (OTP) along with self-declaration of name and unique identity / identification number of any ‘mandatory document’ or ‘Officially Valid Document (OVD)’. These come with limits such as total outstanding capped at ₹10,000.
Similarly, the value of gift PPIs cannot exceed more than ₹10,000 and would not be purchased by cash.
The amount outstanding on transit PPIs cannot exceed more than ₹3,000.
PPIs for foreign nationals and NRIs would be issued after physical verification of Passport and Visa, for making Person to Merchant (P2M) payments during their stay in India, the norms propose.
Total amount debited from such PPI during any month shall not exceed ₹5 lakh.
The proposed framework aligns regulation of PPIs with the KYC norms issued in 2025.
The norms propose that a PPI issuer should facilitate interoperability with card network or Unified Payments Interface (UPI), on the issuer side to a holder of Full-KYC PPI. as per the conditions prescribed by the respective Network Provider.
A PPI issuer may also facilitate discovery of PPI on third-party UPI mobile applications, it said.
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First Published: Apr 22 2026 | 11:48 PM IST
The proposed framework aligns regulation of PPIs with the KYC norms issued in 2025 | (Photo:PTI)
Ajinkya Kawale Mumbai
Listen to This Article
The Reserve Bank of India (RBI) has proposed a revamp of regulations governing prepaid payment instruments (PPIs) as the central bank looks to tighten risk controls, promote interoperability and reframe classification for such instruments.
The banking regulator has sought the industry’s comments on the draft master directions on PPIs by May 22 this year. It would replace PPI norms issued in 2021.
The RBI has outlined a new classification of these instruments; general purpose PPIs and special purpose PPIs. It added that use of PPI for cross-border transactions was not permitted.
General purpose ones would include Full-KYC (Know Your Customer) PPIs and Small PPIs. Special purpose PPIs include those for use cases such as gifting, transit and PPIs for foreign nationals or non-resident Indians.
A full KYC PPI is issued after completion of customer due diligence according to latest KYC norms and such instruments have a minimum validity of one year from issuance date.
These would come with limits; amount outstanding should not exceed ₹2 lakh, peer-to-peer (P2P) transfers are capped at ₹25,000 per month and cash loading is permitted to ₹10,000 in a month.
Small PPIs are issued on obtaining minimum customer details such as mobile number verified with an One Time Password (OTP) along with self-declaration of name and unique identity / identification number of any ‘mandatory document’ or ‘Officially Valid Document (OVD)’. These come with limits such as total outstanding capped at ₹10,000.
Similarly, the value of gift PPIs cannot exceed more than ₹10,000 and would not be purchased by cash.
The amount outstanding on transit PPIs cannot exceed more than ₹3,000.
PPIs for foreign nationals and NRIs would be issued after physical verification of Passport and Visa, for making Person to Merchant (P2M) payments during their stay in India, the norms propose.
Total amount debited from such PPI during any month shall not exceed ₹5 lakh.
The proposed framework aligns regulation of PPIs with the KYC norms issued in 2025.
The norms propose that a PPI issuer should facilitate interoperability with card network or Unified Payments Interface (UPI), on the issuer side to a holder of Full-KYC PPI. as per the conditions prescribed by the respective Network Provider.
A PPI issuer may also facilitate discovery of PPI on third-party UPI mobile applications, it said.
Don't miss the most important news and views of the day. Get them on our Telegram channel
First Published: Apr 22 2026 | 11:48 PM IST