Date of Issue: April 22, 2026 | Public Feedback Deadline: May 22, 2026
1. Applicable Entities
The guidelines under this Draft Master Direction are applicable to the following entities operating within the digital payment ecosystem:
- Bank PPI Issuers: Scheduled Commercial Banks and other banking entities permitted by the RBI to issue digital wallets and prepaid cards.
- Non-Bank PPI Issuers: Authorised Payment System Operators (PSOs) issuing wallets, gift cards, and transit cards.
- System Participants: Card networks, UPI platform operators, and merchants integrated with PPI payment systems.
2. Detailed Amendments & Management Action Plans
A. Revised Limits and Classification of PPIs
Specific Changes Required:
- Full-KYC PPIs: Maximum outstanding balance limit increased to ₹2,00,000. Cash loading is capped at ₹10,000 per month, and peer-to-peer (P2P) transfers are restricted to ₹25,000 per month.
- Small PPIs: Capped at ₹10,000 (cash loading only). Fund transfers and cash withdrawals are strictly prohibited. The validity is set to 2 years, after which they must be converted to Full-KYC.
- Gift & Transit PPIs: Gift PPIs are capped at ₹10,000 (non-reloadable). Transit PPIs are capped at ₹3,000 (perpetual validity).
Management Action Plan:
- IT & Product Teams: Reconfigure wallet limit logic in the core payment engine to support the new ₹2 Lakh balance and monthly debit/transfer caps.
- Compliance Team: Implement automated triggers to notify Small PPI holders 90 days prior to their 2-year expiration to initiate the Full-KYC upgrade process.
- Operations: Ensure Transit and Gift PPI parameters are updated across all issuance channels to prevent reload violations.
B. Mandatory Interoperability via UPI & Card Networks
Specific Changes Required:
- All Full-KYC PPIs must facilitate seamless interoperability on the issuer side.
- Wallets must be discoverable on third-party UPI applications.
- Users must be able to scan any UPI QR code or utilize connected card networks for transactions, breaking the “closed-loop” ecosystem.
Management Action Plan:
- Technology Partnership: Initiate API integrations with NPCI (for UPI) and major card networks (Visa, Mastercard, RuPay) if not already fully compliant.
- Security & Testing: Conduct robust penetration testing on the new interoperable endpoints to prevent cross-platform vulnerabilities.
- Marketing & UX: Redesign the app interface to prominently display the UPI functionality and third-party app discoverability to users.
C. Wallets for Foreign Nationals / NRIs (“One World” Wallets)
Specific Changes Required:
- PPI wallets can now be issued to foreign nationals and NRIs visiting India.
- Mandatory physical verification of Passport and valid Visa is required before issuance.
- Wallets must be loaded using foreign exchange (cash or instruments).
- Monthly Person-to-Merchant (P2M) transaction limit is capped at ₹5 Lakh.
Management Action Plan:
- Business Development: Set up kiosks or partnerships at major international airports and tourist hubs for physical verification and onboarding.
- Forex & Treasury: Establish backend mechanisms for real-time currency conversion and compliance with FEMA guidelines for forex loading.
- Risk Management: Configure strict system blocks to prevent Person-to-Person (P2P) transfers from these specific tourist wallets.
D. Stricter Financial & Escrow Governance (Non-Banks)
Specific Changes Required:
- Capital Norms: New entrants require ₹5 Crore net worth, scaling to ₹15 Crore by the 3rd financial year.
- Escrow Accounts: Funds must be maintained in a separate INR escrow account with a commercial bank.
- Certification: Inter-escrow transfers now require strict auditor certification.
Management Action Plan:
- Finance & Accounting: Conduct an immediate gap analysis on current net-worth trajectory versus the ₹15 Crore requirement.
- Audit Committee: Appoint a dedicated internal statutory auditor to certify daily/weekly inter-escrow transfer reconciliations.
- Treasury: Review existing commercial bank partnerships to ensure escrow agreements align precisely with the updated segregation mandates.
E. Customer Protection, Refunds, & Dormancy Controls
Specific Changes Required:
- Refunds: Failed/cancelled transaction refunds must be credited to the PPI *immediately*, even if it causes the wallet to temporarily exceed prescribed balance limits.
- Dormancy: PPIs with no transactions for 1 year must be marked inactive. They must be permanently closed after 1 additional year of inactivity, with balances remitted to the source account.
- Disclosures & Grievances: Terms and fees must be disclosed in English, Hindi, and local languages. Mandatory integration into the RBI Integrated Ombudsman Scheme.
Management Action Plan:
- Customer Service & Legal: Draft and publish simplified, multilingual “Terms of Use” and fee schedules across the website and application.
- Core Engine Overhaul: Update the payment gateway logic to bypass standard balance limit checks *only* for incoming immediate refund API calls.
- Database Management: Create an automated cron job to flag accounts inactive at 365 days, and initiate auto-closure and source-account sweeping at 730 days.
RBI Press Release
Next Steps: The Management and Compliance teams should review this blueprint and submit any institutional comments/feedback to the RBI via the ‘Connect 2 Regulate’ portal on or before May 22, 2026.