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ARTICLE · 08 DECEMBER 2021

Regulations On E-Wallets, Gift Cards And Vouchers Given A Facelift

Nishith Desai Associates
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In a significant update, the Reserve Bank of India ("RBI") released the Reserve Bank of India Master Directions on Prepaid Payment Instruments, 2021 ("PPI Regulations") in August, 2021.

IndiaFinance and Banking
Inika Charles
Inika Charles
Aaron Kamath
Aaron Kamath
Huzefa Tavawalla
Huzefa Tavawalla
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  • Closed loop prepaid instruments not regulated by RBI.
  • RBI authorization required to issue prepaid instruments which can be redeemed for goods or services from third parties.
  • Non-banks permitted to issue prepaid instruments with cash withdrawal.
  • Two Factor Authentication requirement introduced for transactions via prepaid instruments.

Introduction

In a significant update, the Reserve Bank of India ("RBI") released the Reserve Bank of India Master Directions on Prepaid Payment Instruments, 2021 ("PPI Regulations")1 in August, 2021. The PPI Regulations subsume the Reserve Bank of India (Issuance and Operation of Prepaid Payment Instruments) Directions, 2017 ("2017 Regulations")2 with immediate effect, and also consolidate various circulars on pre-paid instruments ("PPIs") that had been issued between 2017 and 2021. These regulations are issued by the RBI under the Payment and Settlement Systems Act, 2007.3

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