Money Wallet License

Overview of Money Wallet License (PPI)

Prepaid Wallets are financial instruments that help in the transfer of money in digital form. The License is obtained for complying with this Prepaid Payment Instrument or Prepaid Wallet System in India; one needs to obtain licenses from RBI. Such, a Prepaid Wallet License is issued under the Payment and Settlement System Regulations, 2008. And the main function of a Prepaid Wallet License is to permit its users to buy items or carry out transactions by using the digital platform.

Type of Prepaid Payment Instruments for Obtaining a Payment Wallet License

1. The latest Master Direction of the Reserve Bank of India (RBI) released in 2021 amended the Master Direction on Issuance and Operation of Prepaid Payment Instruments (2017). The Master Direction has introduced five different kinds of PPIs in India

Cash Loadable Small PPIs – Salient features

1. The amount loaded can’t exceed the Rs.10, 000 in a given month, and in a financial year, it cannot exceed Rs.1, 20,000.
2. The amount outstanding at any point of time shall not exceed Rs. 10,000/-;
3. The total amount debited during any given month shall not exceed 10,000/-;
4. Loading and Reloading can be by cash or electronic means; and
5. Small PPIs have to convert themselves into full-KYC PPIs within a period of 24 months from the date of issue of PPI.

Cash Non-Loadable Small PPIs – Salient features

1. Prohibit small PPIs from transferring funds or cash withdrawals.
2. The amount loaded can’t exceed the Rs.10, 000 in a given month, and in a financial year, it cannot exceed Rs.1, 20,000;
3. The amount outstanding at any point in time shall not exceed Rs. 10,000/;
4. The total amount debited during any given month shall not exceed Rs. 10,000/-;
5. Loading and Reloading shall be from a full-KYC PPI /bank account/credit card /; and
6. The Small PPIs (with cash loading facility) existing as on December 24, 2019 can be converted to Cash Non–Loadable Small PPI, as per the wish of PPI holder.

Full KYC PPIs – Salient features

Banks and non-banks issue KYC Pre-paid Payment Instruments after completing detailed Know Your Customer (KYC). These PPIs are allowed to perform funds transfers or cash withdrawals. The limit for full-KYC PPI accounts will be increased from Rs 1 lakh to Rs 2 lakh.

1. Full- KYC PPIs are reloadable;
2. The amount outstanding shall not exceed the limit of Rs.2,00000/- at any given time;
3. No prescribed limit for total credit/debit during a month;
4. They can use cash withdrawal and funds transfer.

• Specific Categories of PPIs – PPI issuing banks and non-banks will not release for any other category, except as permission under the following categories.

Gift PPIs

1. A prepaid gift instrument shall not exceed the maximum value, i.e., Rs.10000/-;
2. These kinds of instruments are not reloadable;
3. Prohibit funds transfers and cash withdrawals for such instrument.
4. The KYC details will be maintained by the PPI issuer, while customers do not require separate KYC for customers using debit cards and credit cards;

PPI-MTS

1. MTS operators shall issue these PPIs only after authorisation from the concerned authority under the PSS Act;
2. Automated Fare Collection shall be a significant feature of transit services;
3. Only use those merchant outlets whose operations are within premises to use these PPIs.
4. PPI issuer may decide about customer details required for issuance of such PPIs;
5. PPI-MTS issued is reloadable;
6. The maximum value in this type of PPI will not exceed the range of Rs 3,000/- at any time;
7. Prohibit funds transfers and cash withdrawals for such instruments.

Documents Required for Obtaining Prepaid Wallet License

1. Applicant’s name
2. Address Proof of Registered Office
3. No Objection Certificate from RBI
4. Certificate of Incorporation
5. A detailed report of the principal business of the entity
6. Managerial Details
7. Detailed Business Plan and Project Reports
8. Sources of Funds
9. Proposed Capital Amount
10. An audited Balance sheet of the financial year
11. Name and Address of Bankers of the Company
12. Appointment of Statutory Auditor of the Company
13. Expected profits for Indian Financial System
14. Any other Information required by RBI

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