COMPLIANCES APPLICABLE IN RELATION TO ISSUANCE OF GIFT PPI

A. Key compliances applicable to the PPI Issuers under the PPI Master Directions

1.1 Registration of PPI Issuer. The PPI Master Directions requires any bank desirous of issuing PPIs, including gift PPIs, to seek prior approval from the RBI. Any non-bank entity desirous of issuing PPIs, including gift PPIs, is required to obtain authorisation from the RBI as a PPI issuer. The PPI Master Directions prescribe certain specific eligibility requirements for issuance of PPIs by non-banks.

1.2 Anti-money laundering compliances. PPI issuers are required to adhere to the requirements under the KYC Master Directions. In this regard, PPI issuers must have a board-approved AML / KYC policy. The PPI issuer must maintain a log of all the transactions undertaken using the PPIs issued by it, including any gift PPI, for at least 10 years. The PPI issuer shall also file Suspicious Transaction Reports (“STRs”) to Financial Intelligence Unit-India (“FIU-IND”).

1.3 Issuance and loading of PPIs. PPI issuer must have a clear board-approved policy for issuance of various types / categories of PPIs and all activities related thereto. Therefore, the PPI issuer must have a policy for issuance of gift PPIs also. Further, PPI issuers are required to adhere to the following requirements specifically in respect of issuance and loading of gift PPIs:

(a) Ensure that the name of the PPI issuer is prominently displayed along with the PPI brand name.

(b) Not pay any interest on PPI balances.

(c) PPI may be loaded by cash, debit to a bank account, credit and debit cards, PPIs and other payment instruments issued by regulated entities in India and shall be in INR only.

(d) PPIs may be issued as cards, wallets, and in any such form / instrument which can be used to access the PPI and to use the amount therein. No PPI must be issued in the form of paper vouchers.

1.4 Co-branding of PPIs. The co-branding arrangement must be as per the board approved policy of the PPI issuer. The policy must clearly lay down the roles, responsibilities and obligations of each co-branding partner. PPI issuer shall be liable for all acts of the co-branding partner. The PPI issuer shall also be responsible for all customer-related aspects of the co-branded PPIs. PPI issuer is permitted to co-brand the PPIs with the name / logo of the company for whose customers / beneficiaries such co-branded instruments are to be issued. The name of the PPI issuer must be prominently visible on the co-branded PPI. Non-bank PPI issuer desirous of issuing co-branded PPIs must seek one time approval from the RBI.

1.5 Specific compliances in relation to Gift PPIs. Prepaid gift instruments are subject to the following additional compliance requirements:

(a) Maximum value of each prepaid gift instrument must not exceed INR 10,000.

(b) These instruments shall not be reloadable.

(c) Cash-out or refund or funds transfer shall not be permitted for such instruments.

(d) KYC details of the purchasers of such instruments shall be maintained by the PPI issuer. Separate KYC would not be required for customers who are issued such instruments against debit to their bank accounts and / or credit cards in India.

(e) Entities must adopt a risk-based board-approved approach in deciding the number of prepaid gift instruments which can be issued to a customer, transaction limits, etc.

(f) The PPI issuer must provide the prepaid gift PPI holder the option to revalidate the gift PPI (including through issuance of new instrument) as per the board-approved policy of the issuer.

(g) The features of gift PPIs must be clearly communicated to the PPI holder by SMS / e-mail / post or by any other means at the time of issuance of the PPI / before the first loading of funds.

(h) 2-factor authentication / additional factor of authentication is not mandatory for gift PPIs.

1.6 Validity and redemption. All issued PPIs, including gift PPIs, must have a minimum validity period of 1 year from the date of last loading in the PPI. PPI issuers are free to issue PPIs with a longer validity. In case the PPI is issued in the form of card (with validity period mentioned on the card), then the customer must be given the option to seek replacement of the card. In case the PPI holder approaches the PPI issuer for refund of such amount, at any time after the expiry date of PPI, then the same must be paid to the PPI holder in a bank account.

1.7 PPIs with no financial transaction for a consecutive period of 1 year must be made inactive by the PPI issuers after sending a notice to the PPI holder/s. These can be reactivated only after validation and applicable due diligence.

1.8 Interoperability. Gift PPI issuers have the option to offer interoperability on the prepaid gift instruments issued by them. Where the PPIs are issued in the form of wallets, interoperability across PPIs shall be enabled through UPI; and where the PPIs are issued in the form of cards (physical or virtual), the cards shall be affiliated to the authorised card networks.

1.9 Disclosure of terms. PPI issuers are required to disclose all important terms and conditions in clear and simple language (preferably in English, Hindi and the local language) to the holders while issuing the instruments. These disclosures shall include:

(a) All charges and fees associated with the use of the instrument; and

(b) The expiry period and the terms and conditions pertaining to expiration of the instrument.

1.10 Grievance redressal. The framework shall include, inter alia, the following key obligations:

(a) disseminate the information of customer protection and grievance redressal policy in simple language.

(b) clearly indicate the customer care contact details, including details of nodal officials for grievance redressal (telephone numbers, email address, postal address, etc.) on website, mobile wallet apps, and cards.

(c) provide specific complaint numbers for the complaints lodged along with the facility to track the status of the complaint by the customer.

(d) initiate action to resolve any customer complaint / grievance expeditiously, preferably within 48 hours and endeavour to resolve the same not later than 30 days from the date of receipt of such complaint / grievance.

(e) in case of PPIs issued by banks and non-banks, customers shall have recourse to the Reserve Bank - Integrated Ombudsman Scheme, 2021 for grievance redressal.