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RBI Permits PPIs from Approved Entities for Public Transit Payments

Published on February 24, 2024
Current Context: The Reserve Bank of India (RBI) has recently made an amendment to its Master Direction on Prepaid Payment Instruments (PPIs).
RBI Permits PPIs from Approved Entities for Public Transit Payments
  • This amendment allows authorized bank and non-bank issuers to issue PPIs for making payments across various public transport systems.
  • Public transport systems across India cater to a multitude of commuters on a daily basis.
  • The aim of this amendment is to provide convenience, speed, affordability, and safety of digital modes of payment to these commuters for transit services.
  • The Master Directions on PPIs prescribes the various types of PPIs which banks and non-banks can issue after obtaining necessary approval or authorization from RBI.
  • With this amendment, the paragraph 10.2 of the Master Directions has been updated.
  • These instructions were issued under Section 18 read with Section 10 (2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and came into effect immediately.
  • This is a significant step towards enhancing the digital payment infrastructure in public transportation.

Question:

Q.1 What recent amendment has the Reserve Bank of India (RBI) made to its Master Direction on Prepaid Payment Instruments (PPIs)?
a. It allows only bank issuers to issue PPIs for making payments across various public transport systems.
b. It allows authorized bank and non-bank issuers to issue PPIs for making payments across various public transport systems.
c. It allows only non-bank issuers to issue PPIs for making payments across various public transport systems.
d. It disallows both bank and non-bank issuers from issuing PPIs for making payments across various public transport systems.
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