RBI allows banks, non-bank of issue PPIs for public transport

RBI has allowed banks and non-banks to issue prepaid payment instruments (PPIs) for public transit services such as metro, buses, rail, waterways, tolls, and parking.

The regulator amended the guidelines for PPIs for mass transit systems (MTS). It said such PPIs could be issued without a “know your customer” (KYC) verification of the holder.

“Public transport systems across the country cater to a multitude of commuters on a daily basis. To provide convenience, speed, affordability, and safety of digital modes of payment to commuters for transit services, it has been decided to permit authorised bank and non-bank PPI issuers to issue PPIs for making payments across various public transport systems,” the central bank said.

PPIs are instruments that facilitate purchases of goods and services, financial services, remittance facilities, among others, against the value stored in them.

In the latest amendment, the RBI said PPIs for the “Mass Transit System” (MTS) would contain the “Automated Fare Collection” application related to transit services, toll collection, and parking.

The outstanding amount will not exceed Rs 3,000, the regulator said. While these instruments can be reloaded, withdrawing cash, refund, or fund transfer will not be permitted in PPIs.