RBI increases time allowed for converting minimum KYC PPI into full KYC PPI


Often prepaid instruments (PPIs) are issued by financial services companies on the basis of minimum or limited KYC. For example, wallet services provided by Paytm Payments Bank require that for issuing wallet to customer minimum KYC must be completed. Till now, minimum KYC was valid for 18 months. For using wallet beyond 18 months as well as for availing complete benefits of wallet, full KYC needed to be completed.

The RBI has notified today that the timeline for conversion of minimum KYC detail for prepaid payment instruments (PPIs) to full KYC compliant PPIs has been extended from 18 months to 24 months. The notification says that this timeline will not be extended any further.

Generally, for mimium KYC complaint, e-wallet service providers asks for user’s mobile number and any one government identification number to authenticate the account. However, full KYC requires a more detailed verification procedure. Normally, PAN card and proof of address is among the pre-requisites for full KYC.

Bank and non-banks are permitted to issue semi closed PPIs for upto Rs 10,000 after obtaining minimum details of the PPI holder.

The minimum details shall include mobile number verified with One Time Pin (OTP) and self-declaration of name and unique identification number of any of the ‘officially valid document’ defined under Rule 2(d) of the PML Rules 2005, as amended from time to time.

The RBI rules for such PPIs state that:

1. These PPIs shall be reloadable in nature and issued only in electronic form, including cards.

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2. The amount loaded in such PPIs during any month shall not exceed Rs 10,000 and the total amount loaded during the financial year shall not exceed Rs 1,00,000

3. The amount outstanding at any point of time in such PPIs shall not exceed Rs 10,000

4. The total amount debited from such PPIs during any given month shall not exceed Rs 10,000

5. These PPIs shall be used only for purchase of goods and services. Funds transfer from such PPIs to bank accounts and also to PPIs of same / other issuers shall not be permitted.

6. There is no separate limit on purchase of goods and services using PPIs and PPI issuer may decide limit for these purposes within the overall PPI limit.

7. These PPIs shall be converted into KYC compliant semi-closed PPIs within a period of 24 months from the date of issue of PPI, failing which no further credit shall be allowed in such PPIs. However, the PPI holder shall be allowed to use the balance available in the PPI.

8. PPI issuers shall ensure that this category of PPI is not issued to the same user in future using the same mobile number and same minimum details.

9. PPI issuers shall give an option to close the PPI at any time and outstanding balance, at the time of closure, shall be transferred at the request of the holder to the ‘own bank account of the PPI holder’ (duly verified by the Issuer), after complying with KYC requirements of the PPI holder. PPI issuers shall also allow to transfer the funds ‘back to source’ (payment source from where the PPI was loaded) at the time of closure.

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10. The features of such PPIs shall be clearly communicated to the PPI holder by SMS/e-mail/post or by any other means at the time of issuance of the PPI / before the first loading of funds.





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