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Ban On loading through Credit Lines

Published on June 22, 2022
Current Context: Reserve Bank of India’s (RBI’s) notification disallowing non-bank prepaid payment instruments (PPIs) from loading their instruments through credit lines has sent industry players.
Ban On loading through Credit Lines
  • An Industry body of PPIs has met the regulator to get clarity on the issue and present their views to RBI.
  • The PPI master directions do not permit the loading of PPIs from credit lines.
  • Any penalty will attract for non-compliance under provisions contained in the Payment and Settlement Systems Act, 2007.
  • PPIs are instruments that facilitate the purchase of goods and services, the conduct of financial services, and enabling of remittance facilities.
  • According to the RBI, there are over 35 non-bank PPI issuers in the country, including Amazon Pay, Bajaj Finance, and Phone Pe, among others.
  • As per a recent report by Macquarie Research, some of the new generation players were adding closer to 200,000-300,000 cards using PPI licence.

Question:

Q.1 RBI has disallowed ___________ from loading their instruments through credit lines.
a. Payment Banks
b. Public Sector Banks
c. Private Sector Bank
d. Non-bank prepaid payment instruments

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