RBI Draft Master Direction on PPIs: Limits, UPI Interoperability
Why in the news
RBI floated a draft Master Direction to overhaul PPI rules. It matches them with the 2025 KYC norms, tightens risk controls and pushes interoperability across digital payments.
Key facts
- PPI: a store of pre-loaded value used to pay for goods and services or send funds.
- Form: card or digital wallet; paper vouchers are banned.
- Cross-border: not allowed; PPIs stay domestic.
- Discovery: issuers may show and use wallets inside third-party UPI apps, a first.
- Inactivity: no transactions for one year means inactive, with ways to reactivate or close.
Limits by type
| PPI type | Limits and features |
|---|---|
| Full-KYC (general purpose) | Balance up to ₹2 lakh; P2P ₹25,000 a month; cash loading ₹10,000 a month |
| Small PPI | Balance up to ₹10,000; opened with OTP and self-declared ID; merchant payments only, no cash loading or transfers |
| Gift PPI | Maximum ₹10,000; non-reloadable; cannot be bought with cash |
| Transit PPI | Public transport and tolls; balance up to ₹3,000 |
| Foreign national / NRI PPI | Passport or visa verification; P2M use; monthly debit up to ₹5 lakh |
Interoperability
- Full-KYC wallets must pay through UPI by scanning any QR, and cards must work at any POS terminal via card networks.
- This ends the closed-loop nature of wallets, so a user is no longer stuck in one app.
Significance
- Stronger digital onboarding and fraud prevention under the 2025 KYC alignment.
- Gift PPIs are not bought with cash, keeping a clear audit trail against money laundering.
Exam angle
- Regulator: RBI; replaces the 2021 framework; two groups: general purpose and special purpose.
- Numbers: ₹2 lakh, ₹25,000, ₹10,000, ₹3,000, ₹5 lakh.
- Terms: P2P, P2M, interoperability, full-KYC.