Updated February 23rd, 2024 at 16:03 IST

RBI allows banks and NBFCs to issue pre-paid instruments

This decision is expected to provide commuters with more convenient and safer alternatives to cash payments.

Reported by: Business Desk
RBI allows banks and NBFCs to issue pre-paid instruments  | Image:PTI
Advertisement

Pre-paid instruments: In a move aimed at enhancing digital payment options, the Reserve Bank of India (RBI) has permitted banks and non-banking financial institutions to issue pre-paid instruments (PPIs) for making payments across various public transport systems. This decision is expected to provide commuters with more convenient and safer alternatives to cash payments.

According to the central bank, these instruments will offer commuters the benefits of convenience, speed, affordability, and safety associated with digital modes of payment for transit services. It is particularly significant given the daily influx of commuters using public transport systems across the country.

Advertisement

In its June 2023 monetary policy, the RBI announced its decision to allow non-banking prepaid payment instrument issuers to issue e-RUPI vouchers. These vouchers are pre-paid digital instruments that can be received by beneficiaries on their phones in the form of an SMS or QR code.

RBI Governor Shaktikanta Das, in his monetary policy review speech, highlighted that these measures aim to make the benefits of e-RUPI digital vouchers accessible to a wider range of users, further deepening the penetration of digital payments in the country.

Advertisement

The central bank has also proposed enabling the issuance of e-RUPI vouchers on behalf of individuals to simplify the issuance and redemption process. Prime Minister Narendra Modi launched e-RUPI, a cashless and contactless instrument for digital payments, on August 2, 2021.

(with PTI inputs)

Advertisement

Published February 23rd, 2024 at 16:03 IST