The Most Authentic Guide on Personal Finance and Investments


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e-wallet for your child or spouse is now a reality

Good news! You can, henceforth, give an electronic prepaid card to your near and dear ones. 

Reserve Bank of India, vide its circular 'Issuance and Operation of Pre-paid Payment Instruments (PPIs) in India- Relaxations' dated Dec 3, 2014, has permitted banks to issue 'prepaid payment instruments' to their customer's family members and dependents.

Prepaid payments instruments come in many forms such as smart cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets or paper vouchers and which can be used to access the prepaid amount. 


The key parameters to be considered for the issue of such e-wallets to your family members and dependents are detailed below.

1. You should have a fully KYC compliant bank account. These PPIs would be loaded from such accounts only.

2. The beneficiary should be a family member /
dependent.

3. These PPIs will be issued only in the electronic form.

4. You are allowed to buy only one such prepaid payment instrument for one beneficiary.

5. Banks will normally ask you to furnish minimal details, viz. name, address and contact number, of the person for whom you propose to buy this PPI.

6. The limits prescribed for such PPIs are Rs.10,000 per transaction and a monthly ceiling of Rs.25,000.

7. Such PPIs would be the so-called 'open system payment instruments'. In other words, these can be used for varied kinds of transactions such as purchase of goods / services, funds transfer and cash withdrawals at ATMs (unlike closed and semi-closed PPIs which have a restricted usage).

8. Guidelines, as applicable to the open system prepaid payment instruments, will apply to these PPIs too.

9. Banks can monitor the transactions carried out with these prepaid payment instruments and report those that appear suspicious.

In addition, vide the aforesaid circular, RBI has
a) Increased the validity of Gift Cards from one year to three years (Know more about gift cards on my blog post 'Is your Gift a Junk'.)

b) Enhanced the limit on PPIs for full KYC compliant customers from Rs.50,000 to Rs.1 lakh. (By the way, unlike the Gift Cards, these are reloadable in nature.)

c) Allowed banks to issue rupee-denominated non-reloadable 
- prepaid payment instruments and
- co-branded PPIs with RBI approved exchange houses / money transmitters
to NRIs and foreign nationals visiting India, subject to the specified conditions.

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