RBI Proposes PPI Overhaul and E-Mandate Framework Updates

The Reserve Bank of India on April 22 proposed a comprehensive overhaul of regulations for prepaid payment instruments, alongside issuing immediate updates to the framework for electronic mandates on recurring digital transactions, aiming to bolster security, user control, and growth in the country's expanding payments ecosystem.

The draft Prepaid Payment Instruments Directions, 2026, seek to replace existing guidelines from 2021 with stricter governance for issuers, including banks and nonbank entities such as fintech firms. Prepaid instruments, which allow users to load funds for subsequent payments, will be classified more sharply into categories like general-purpose, special-purpose, gift, transit, and those for non-resident Indians or foreign visitors. For full-know-your-customer general-purpose wallets, balances will remain capped at 200,000 rupees, with monthly transaction limits intact, while minimal-documentation small PPIs will be limited to 10,000 rupees and restricted to merchant payments. Newer options, such as transit wallets and prepaid instruments under the UPI One World initiative for tourists, will formalize integration with public services and inbound travel.