New India! Another big step towards Modi government's ambitious Digital India and Cashless Economy - Know details

Right from assuming PM office, Narendra Modi laid heavy emphasis on making India a Digital and Cashless Economy. Now, yet another step has been taken in the same direction. The Reserve Bank of India has made a big announcement.

The RBI said that it will introduce a new type of prepaid payment instrument (PPI) which could be used only for the purchase of goods and services up to a limit of Rs 10,000.

What are PPIs?

PPIs are financial instruments that facilitate the purchase of goods and services against the value stored on such instruments.

Only valid for Digital Payments

Accordingly, the loading of such PPI will be only through a bank account and it could be used for making only digital payments such as bill payments and merchant payments, among others.

Basis of issuance of these PPIs?

"Such PPIs can be issued on the basis of essential minimum details sourced from the customer. Instructions in this regard will be issued by December 31, 2019," the RBI said in a statement on developmental and regulatory policies.

What RBI said? All you need to know

RBI says, "Finally, in the area of payment and settlement, Prepaid Payment Instruments (PPIs) have been playing an important role in promoting digital payments. To further facilitate PPI usage, it is proposed to introduce a new type of PPI which can be used only for purchase of goods and services up to a limit of ₹10,000."

"The loading / reloading of such PPI will be only from a bank account and they shall be used for making only digital payments," the Central bank added in its statement.