DMPQ- Write a short note on Prepaid instruments.

PPIs are instruments that facilitate the purchase of goods and services, including financial services, remittance facilities, etc., against the value stored on such instruments. The value stored on such instruments represents the value paid for by the holders by cash, by debit to a bank account, or by credit card.

The pre-paid instruments can be issued as smart cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers and any such instrument which can be used to access the pre-paid amount.

A company incorporated in India and registered under the Companies Act, 1956 / Companies Act, 2013, having a minimum paid-up capital of Rs. 5 crore and minimum positive net worth of Rs. 1 crore at all the times are permitted to issue PPIs in India.

PPIs can be reloadable or non-reloadable. The loading/reloading of PPIs shall be through payment instruments issued by entities regulated in India and shall be in Indian Rupees (INR) only. Banks are permitted to issue and reload such payment instruments at their branches and ATMs against payment by cash/debit to bank account/credit card and through their business correspondents (BCs). In the case of non-reloadable PPIs, the outstanding amount in it can be transferred to a new similar PPI of the same issuer, upon expiry.

 

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