The Reserve Bank of India on April 22, 2026, released the draft Master Directions on Prepaid Payment Instruments, 2026 for public consultation.

It marks an important step toward consolidating the regulatory framework governing PPIs in India. The consultative approach adopted by the RBI is a welcome move and reflects the growing maturity of India's digital payments ecosystem. (Refer to our explanatory blog on the Draft here).

Based on industry inputs, Nasscom has provided its feedback on the draft, and we have highlighted certain areas where additional clarity and operational guidance would help improve implementation, ease of doing business for stakeholders and address the concerns of the industry. Some key concerns in our submission are summarised below:

Clarifying Fund Transfer Provisions

The draft introduces a monthly cap of ₹25,000 for person-to-person (P2P) transfers from Full-KYC PPIs. However, the omission of the earlier "back-to-source" and "own bank account" transfer provisions creates ambiguity regarding whether such transfers would also fall within the P2P cap. We have recommended that transfers to source accounts and verified own bank accounts should continue to be permitted outside this limit.

Need for Operational Clarity on Reloadability of PPIs

The draft does not explicitly address certain operational aspects that were previously covered, including reloadability provisions for Small PPIs and Transit PPIs. Clarifications on these aspects would support smoother implementation and reduce uncertainty for issuers and users alike.

Preserving Interoperability

Acceptance-side interoperability has been a key feature of India's digital payments ecosystem. The absence of explicit provisions in the draft directions raises concerns regarding whether merchant-acquiring PPIs and QR systems would continue to remain fully interoperable. Given the importance of seamless acceptance of payments through prepaid wallets, we have requested that the final master directions should explicitly provide from acceptance-side interoperability.

Rethinking the Monthly Debit Cap

The proposed ₹2 lakh monthly debit limit for Full-KYC PPIs is another area of concern. While the existing framework already caps outstanding balances, an additional monthly debit restriction may impact legitimate high-value transactions such as insurance premium payments, utility payments, and credit card bill payments conducted through merchant and BBPOU channels. We have submitted that a reconsideration of this proposed limit to avoid disruption for compliant users with fully traceable transactions is crucial to maintain a robust PPI market.