RBI Enables UPI Transactions via Full-KYC Prepaid Payment Instruments (PPIs).

Banking & Finance

In December 2024, the Reserve Bank of India (RBI) introduced a provision allowing Unified Payments Interface (UPI) transactions to be conducted from or to Full-KYC (Know Your Customer) Prepaid Payment Instruments (PPIs) via third-party UPI applications (apps).


      - This initiative aligns with the RBI's Statement on Development and Regulatory Policies announced on April 5, 2024.

      - Earlier, UPI payments for PPIs were restricted to the PPI issuer's own mobile apps.

     

Main Point :-   (i) Under the updated framework, PPI issuers can now enable holders of Full-KYC PPIs to link these instruments to UPI handles, facilitating payments and fund transfers through third-party UPI apps.

      (ii) Transactions will be pre-approved within the UPI system to ensure security, with authentication performed using the existing credentials of the PPI.

(iii) PPI refers to a financial tool that allows users to store funds on a card or digital wallet for seamless future transactions.

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