India’s digital wallet ecosystem could see major changes after the Reserve Bank of India proposed a revised framework for Prepaid Payment Instruments (PPIs), impacting platforms such as Paytm, PhonePe, and other digital wallet providers.
The draft framework aims to strengthen transaction security, improve customer protection, and support the long-term growth of India’s digital payments ecosystem. The proposal covers mobile wallets, prepaid cards, gift cards, transit cards, and wallets designed for NRIs and foreign nationals.
Under the proposed rules, general-purpose wallets may be allowed to hold balances of up to ₹2 lakh, while monthly cash loading could be capped at ₹10,000. Gift wallets may be restricted to ₹10,000, and transit wallets could have a maximum limit of ₹3,000.
The RBI has also proposed instant refunds for failed, cancelled, or rejected wallet transactions. The move is expected to improve user trust and customer experience across digital payment platforms.
Another major proposal focuses on interoperability. Fully KYC-compliant wallets may become discoverable across UPI platforms and card networks, enabling smoother cross-platform transactions and broader payment acceptance.
The framework also introduces stricter eligibility norms for non-bank wallet issuers. Companies would need a minimum net worth of ₹5 crore initially and ₹15 crore within 3 years of authorisation. Additionally, wallet providers would be required to clearly disclose charges, validity periods, and terms in simple language.
The RBI further proposed stronger grievance redressal systems and barred agents from charging customers additional fees. Non-bank issuers would also need to maintain customer funds in dedicated escrow accounts with commercial banks in India.
Industry observers believe the proposed changes could significantly influence how Indians use digital wallets, while also increasing transparency, security, and operational accountability in the rapidly growing digital payments market.
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