RBI issues draft master circular for revised PPI norms
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In also a major step forward the regulator has proposed making PPIs interoperable across the banking system but only after the entity meets all the regulatory criteria it has laid out.
"All entities authorised by the RBI under the Payments and Settlement Systems Act 2007 shall have a minimum net worth of Rs 25 crore as per the last audited balance sheet and shall be maintained at all times," said the RBI master circular issued on Monday.
The circular further laid out details about those who have already been licenced by the regulator would need to meet the capital requirements by September 30 of 2020, failing which they will be stopped from functioning further.
It has further instructed PPI issuers to move completely to the electronic format like mobile wallets, magnetic cards or smart cards and thereby instructed them to stop issuing paper vouchers anymore.
Hinting directly at entities who issue Sodexo and Ticket Restaurant meal vouchers the RBI said that those who are issuing paper vouchers on a B2B (business to business) arrangement will have to stop doing so by December 31 of 2017.
The RBI has also introduced strict KYC norms for wallet holders with maximum balance limit of Rs 20,000 who otherwise were allowed to operate with minimum KYC requirements.
" PPI issuers shall ensure that all the existing minimum detail PPIs are converted into full KYC semi closed PPIs by June 30, 2017," read the circular.
The RBI has also instructed PPI issuers to close the accounts of those who have kept it dormant for more than a year after providing due intimation to the customer.
In order to keep money kept in mobile wallets safe the regulator has specified various security arrangements essential on the part of the PPI. Starting from putting additional factor of authentication for transactions to proper secured access mechanisms to be developed by the PPI licence holders. It has also asked entities to introduce a cooling period between funds loaded into the wallet and used for transactions in order to prevent fraudulent siphoning off of money from wallets. #casansaar (Source - Economic Times)
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