RBI strict KYC norms on e-wallets, to become interoperable in 6 months

mobile wallet

The Reserve Bank of India (RBI) has directed companies and banks to make KYC (know-your-customer) compliant prepaid payment instruments (PPIs) — mobile wallets, interoperable within the next six months.

According to the new guidelines, all the PPIs will now be interoperable, which means it will allow a transaction with each other. It brought in fraud detection norms to prevent fake wallet transactions ­­ steps which will change the scope of operations for mobile wallets.

Customers can now move money between wallets of different companies and banks seamlessly through Unified Payments Interface (UPI) provided they complete full KYC formalities like they do for bank accounts.

“The fact that 12 months has been given for conversion of wallets into full KYC ones shows that they have enough time to convince customers to complete KYC requirements,” said Naveen Surya, chairman of Payments Council of India, the industry body for payments players. “I believe, by then, the KYC for mobile numbers can be completed and Aadhaar rails might improve, making it easier to get KYC formalities done.”

Also Read: RBI to e-tailers: Clear payment of merchants within two days

The RBI said minimum KYC wallets cannot have a balance of more than Rs 10,000 and this can be allowed only for the purchase of goods and services and not for remittances to other wallets or bank accounts. These wallets will have a limit of Rs 1 lakh and all facilities for fund transfer will be allowed.

Prepaid payment instruments cannot be loaded with more than Rs 50,000 per month and the issuers cannot pay interest on the PPI balances, the Reserve Bank said today.
For increasing the limit of PPIs to up to Rs 1 lakh, the issuers will have to do a KYC check of the instrument holder.

RBI has also increased the net worth requirements for players in this space. For a PPI licence, companies need a positive net worth of Rs 5 crore at the time of application against Rs 2 crore previously. This has to be Rs 15 crore within the third financial year of receiving RBI authorisation.

RBI: Website

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