The Reserve Bank of India (RBI) on Tuesday doubled the balance that can be kept in prepaid wallets and cards to Rs 20,000 to help small merchants get paid electronically after the government withdrew high value bills
Small merchants will also be able to transfer up to Rs 50,000 per month to their linked bank account through semi-closed prepaid instruments (PPIs), without any limit per transaction. Merchants only need to provide a self-declaration in respect of their status and details of their account
The above measures will be effective from November 21 to December 30, 2016, subject to review, the Reserve Bank of India said.
PPIs can be issued as smart cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers and any such instrument which can be used to access a pre-paid amount.
There are closed, semi closed and open wallets. Semi closed PPIs are used to buy goods and services, including financial services, from merchants that have a specific contract with the issuer.
The earlier PPI guidelines did not specifically provide for opening of PPIs for such merchants as a separate category and the limit for semi-closed PPIs issued with minimum details was Rs 10,000.
“The limit of semi-closed PPIs issued with minimum details has been enhanced to Rs 20,000 from the existing Rs 10,000. The total value of reloads during any given month has also been enhanced to Rs 20,000,” the Reserve Bank of India said.
The central bank’s latest guidelines come amid a rather chaotic time in the country following the government’s decision to demonetise 1,000 and 500 rupee banknotes. In a surprise announcement on November 8, Prime Minister Narendra Modi announced the decision as a part of the government’s crack down on black money. However, the scrapping of the high value notes left a large void in the circulation of banknotes as the newly introduced Rs 2,000 and 500 notes were phased in. People have since been queueing up at banks, post offices, petrol bunks and ATMs to deposit their invalid money and exchange it for legal tender.
(With inputs from agencies)