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ARTICLE · 04 MAY 2017

Release Of Draft Rules For Security Of Prepaid Payment Instruments

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The Draft Rules have been issued with this perspective and applies largely to electronic PPIs.

IndiaTechnology
Harsh Walia
Harsh Walia
Abhinav Chandan
Abhinav Chandan
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The Ministry of Electronics and Information Technology, on 8 March 2017, released the draft Information Technology (Security of Prepaid Payment Instruments) Rules, 2017 (Draft Rules), under the Information Technology Act, 2000 (IT Act), for public comments.

Background

The Draft Rules seek to provide a framework of security practices for 'electronic prepaid payment instruments', in view of the Government's recent efforts to promote a cashless economy post demonetisation and the resulting boost to digital payment systems in India.

According to the definition provided by the Reserve Bank of India (RBI), prepaid payment instruments or "PPIs" as they are commonly known, are "payment instruments that facilitate purchase of goods and services, including funds transfer, against the value stored on such instruments". PPIs are mainly governed by the provisions of the Payments and Settlement Act, 2007, and related guidelines and master circulars of RBI.

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