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Digital payments are now a big part of daily life in India. An important part of this system is prepaid payment instruments or PPIs. So, these are payment tools where money is first loaded, and then that money can be spent. Such as digital wallets, prepaid cards, gift cards, and transit cards.
In April 2026, the RBI released a new draft rule, called Draft Master Direction on Prepaid Payment Instruments (PPIs), 2026. This new rule aims to make this sector safer, more transparent, and stronger. This will provide better protection for the customers, and the industry will also progress better. Also, PPI license seekers must be aware of the regulatory updates.
Prepaid Payment Instruments, or PPI, are a payment tool where you add money first. Then you spend that money later. Meaning, load money first and use it later.
There are some common types of PPI:
PPI is used for online shopping, mobile recharge, bill payments, and even metro or bus fares. Suppose you add ₹1,000 to a digital wallet. Then, you can order food, pay electricity bills, or make payments at shops. This is how PPI has made our daily transactions easier.
The use of prepaid payments in India has increased very rapidly. More people are using digital wallets, prepaid cards, and UPI than ever before. The total transactions till March 2025 were around 297 billion. This is more than 100 times more than in 2012. This growth is quite surprising.
So, the old rules of 2021 are no longer sufficient. Times have changed, and technology has also advanced a lot. New fintech companies have come. People’s usage has also increased a lot.
RBI is bringing new rules, such as:
RBI wants new technology to come. But security and trust must always be maintained.
The RBI’s draft PPI rules for 2026 have brought several important changes. The main aim is to make the sector safer, more transparent, and stronger.
From now on, non-bank entities that want to issue PPI will have to be registered in India. But their company’s objects clause will have to clearly mention the issue of PPI. Most importantly, they will not be able to launch a PPI without RBI’s approval.
Non-bank PPI issuers will have to have a net worth of at least ₹5 crore at the time of application. Moreover, this net worth will have to reach ₹15 crore by the end of the third financial year after getting approval. This will allow only financially strong entities to survive in the market.
This will give users more benefits, but there will also be controls.
P2P transfers cannot be made
Cash withdrawals cannot be made
Maximum tenor: 2 years
These restrictions are in place for small transactions, which are less risky.
Gift PPI is usually used for gifting. It cannot be reloaded. It has to be used once it is loaded. Its maximum value is ₹10,000.
Transit PPI is mainly used for transportation, such as the metro or bus cards. It does not require a KYC. However, it can hold a maximum balance of ₹3,000. It is very convenient for short and daily trips.
RBI has launched the UPI One World facility for foreign nationals and NRIs. It can be used while travelling in India.
This will make digital payments in India much easier for foreign visitors.
RBI has given importance to customer protection in the new rules. This will make users’ money safer and will also increase trust in the system.
These changes are very beneficial for customers. This will reduce the risk of fraud. Users will be more secure with their money. People’s trust in the entire PPI system will increase.
The new draft of RBI requires Full-KYC PPI to be interoperable. These wallets can be used on other platforms through UPI or card networks. This will make it easier for users to make payments. Transactions can be made from one wallet to many places.
Co-branding is also allowed. A PPI issuer can partner with another brand or company. A partner can help in marketing or distributing the product.
However, compliance with all types of rules, customer protection, and legal liability will remain entirely with the PPI issuer. This will increase cooperation between fintech companies and brands, and responsibilities will also be clear.
RBI’s new PPI rules will impact all market participants. Some will get new opportunities, while others will face increased challenges.
These rules will make the market more mature and safer.
Businesses should prepare now before the new rules come into effect. Planning will reduce problems later. Delaying compliance can increase problems.
Businesses should:
Companies that prepare will be able to adapt to the new rules more easily. This will also strengthen their position in the market.
Understanding and complying with the new PPI rules can be a challenge for many businesses. Enterslice comes in as a reliable partner.
Our Services:
Enterslice helps businesses comply with regulations and prepares them for long-term success.
RBI’s Draft PPI Rules 2026 is a major step forward for the prepaid payments sector in India. It is not just a new rule but also a new direction. Now, innovation alone is not enough; compliance is equally important to succeed in this sector.
Companies that prepare will stay ahead of the market. Strong governance, customer protection, and proper operational readiness are now essential.
Enterslice can be a trusted partner for businesses at this time of change. We help companies adapt to new regulations easily through the right advice and support. So, contact us today for hassle-free compliance.
PPI is a payment system where money is first deposited and then used. It is much like a prepaid mobile recharge. Digital wallets, prepaid cards, gift cards, and metro cards are all examples of PPIs. They can be used for online shopping, bill payments, ticket bookings, or payments at stores. It is very easy and convenient.
Digital payments in India have grown very rapidly. Now people are using wallets, cards, and UPI more than ever before. The old 2021 rules are not fully adequate for this new reality. Hence, the RBI is bringing new rules. The aim is to increase security, strengthen customer protection, and keep pace with new technology.
Non-bank institutions, such as fintech companies or wallet operators, that want to issue PPI will need RBI approval. They must be registered in India. In addition, the company's object clause should include the issue of PPI. The process is relatively easy for banks. However, RBI approval is mandatory for non-bank companies.
Non-bank PPI issuers should have a net worth of at least ₹5 crore at the time of application. After getting RBI approval, this amount should reach ₹15 crore by the end of the third financial year. The purpose of this rule is that only financially strong and stable institutions should work in this sector. This will also protect the interests of customers.
RBI has set some new limits for Full-KYC PPI. A maximum balance of ₹2 lakh can be maintained. A total of ₹2 lakh can be spent per month. In addition, P2P transfers of up to ₹25,000 can be made per month. A maximum of ₹10,000 can be loaded in cash. This will give users more benefits, but there will also be controls.
Small PPI is mainly for small transactions. It can be used up to a maximum balance of ₹10,000. It can be used up to ₹10,000 per month. P2P transfers cannot be made. Cash withdrawals are also not possible. In addition, its maximum validity is 2 years. These limitations have been kept to reduce risks. It is quite convenient for small users.
UPI One World is a special payment facility for foreign citizens and NRIs. Those who come to India to travel can use it. This facility will be provided after passport and visa verification. Only merchant payments can be made with it. The monthly debit limit is ₹5 lakh. This facility will also be closed when the visa expires.
The new rules have given great importance to customer protection. Customer money must be kept in a separate escrow account. The company cannot use that money for other purposes. Charges, terms, and services must be clearly stated. The refund system will be easier. There will be a better system for reporting complaints. This will increase customer trust and reduce risk.
Interoperability means that a wallet or PPI can be used across platforms. For example, a Full-KYC wallet can be used with other apps or merchants through UPI or card networks. This will greatly increase user convenience. They will not have to be stuck on different platforms. Payments will be easier, faster, and hassle-free.
Enterslice provides complete compliance support to PPI issuers and fintech companies. We help with RBI licensing, registration, KYC, and AML frameworks. We also help with escrow compliance, co-branding agreements, policy formulation, and regulatory filings. So, businesses can carry out their operations.
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