PREPAID PAYMENT INSTRUMENT (PPI) - ECONOMY
News: Deposit
insurance cover for PPIs: How will customers benefit?
What is in the news?
●
Recently, An
RBI-appointed committee has recommended that the central bank should examine
the extension of Deposit Insurance and
Credit Guarantee Corporation cover to PPIs, which, at present, is available only to bank deposits.
Prepaid Payment Instrument:
●
PPIs are instruments that
facilitate the purchase of goods and services, conduct of financial services
and enable remittance facilities, among others, against the money stored in
them.
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PPIs can be issued as cards or wallets.
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There are two types of PPIs:
○ Small PPIs
○ Full-KYC PPIs.
●
Further, small PPIs are categorized as PPIs up to Rs
10,000 (with cash loading facility) and PPIs up to Rs 10,000 (with no cash
loading facility).
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PPIs can be
loaded/reloaded by cash, debit to a bank account, or credit and debit cards.
●
The cash loading of PPIs
is limited to Rs 50,000 per month subject to the overall limit of the PPI.
●
Who
can issue:
○ PPIs
can be issued by banks and non-banks
after obtaining approval from the RBI.
○ As
of now only 58 banks can issue PPIs.
○ Non-Banks
example: Amazon pay, Bajaj finance.