In its Statement on Developmental and Regulatory Policies issued on April 7, 2021, the Reserve Bank of India (RBI) has proposed two measures to make full-KYC PPIs more user-friendly. Firstly, the RBI has proposed to make interoperability mandatory for full-KYC PPIs and for all acceptance infrastructure. To incentivise the migration of PPIs to full-KYC, it has also proposed to increase the limit of outstanding balance in such PPIs from the current level of Rs 1 lakh to Rs 2 lakh.
Secondly, the RBI has proposed to allow the facility of cash withdrawal, subject to a limit, for full-KYC PPIs of non-bank PPI issuers as well. The measure, in conjunction with the mandate for interoperability, is expected to give boost to migration to full-KYC PPIs and would also complement the acceptance infrastructure in Tier III to VI centres.
To promote optimal utilisation of payment instruments (like cards, wallets etc.), and given the constraint of scarce acceptance infrastructure (like PoS devices, ATMs, QR codes, bill-payment touch points, etc.), Reserve Bank of India has been stressing on the benefits of interoperability amongst the issuing and acquiring entities alike, banks or non-banks.
The Master Direction on Issuance and Operation of PPIs dated October 11, 2017 laid down a road-map for a phased implementation of interoperability amongst PPIs issued by banks and non-banks. Thereafter, the guidelines issued in October 2018 enabled interoperability, albeit on a voluntary basis, insofar as the PPIs were full-KYC ( Know Your Customer requirements).
Both the proposals will go a long way as user-friendly measures in the long term. And, these steps gives all the more reason to go for full KYC for the users.