Prepaid Payment Instrument (PPI) Licence
Wallets, prepaid cards and gift cards issued by a non-bank need a Certificate of Authorisation from RBI under the Payment and Settlement Systems Act, 2007. A non-bank issuer needs a positive net worth of ₹5 crore to apply and ₹15 crore by the end of the third financial year. We prepare the Form A application, the net-worth papers and the policies, and handle RBI’s queries.
What it is
A prepaid payment instrument (PPI) holds money paid in advance. You load it first and spend later: at a shop, online, or by sending money to someone. Mobile wallets, prepaid cards, meal cards, gift cards and metro cards are all PPIs. The issuer holds the public’s money, so RBI decides who can issue one.
The rules are in RBI’s Master Directions on Prepaid Payment Instruments (RBI/DPSS/2021-22/82, dated 27 August 2021, updated as on 30 September 2026), issued under the Payment and Settlement Systems Act, 2007. Banks issue PPIs with RBI’s approval. A non-bank must be a company incorporated in India (we can set up the private limited company for you), with PPI issuance in its MoA, and must hold a Certificate of Authorisation (CoA) from RBI’s Department of Payment and Settlement Systems.
Who it applies to
You run a wallet app
Users load money once, then pay merchants, send money or pay bills from the stored balance.
You issue prepaid or gift cards
Think of a Faridabad fintech that wants to issue meal cards to factory staff across Haryana, or gift cards that companies hand out at Diwali.
You sell transit, toll or parking payments
Transit, toll and parking payment products fall under the PPI-MTS category, which can be issued without KYC.
Why it matters
Without a CoA, it is an offence
A non-bank issuing PPIs without a CoA is running a payment system in breach of Section 4 of the PSS Act.
It ring-fences customer money
The escrow account must always hold at least the value of outstanding PPIs and amounts due to merchants.
You get it once, not every few years
Under the Directions, a CoA is granted on a perpetual basis, as long as you keep complying.
Types of PPI and their limits
| PPI type | KYC | Key limits |
|---|---|---|
| Small PPI with cash loading | Mobile number verified by OTP and a self-declaration | Loading up to ₹10,000 a month and ₹1,20,000 a year; outstanding up to ₹10,000; convert to full KYC within 24 months |
| Small PPI without cash loading | Same minimum details | Loaded only from a bank account, credit card or full-KYC PPI; purchases only, no cash withdrawal or transfers |
| Full-KYC PPI | Full KYC | Outstanding up to ₹2,00,000; transfers allowed; cash withdrawal up to ₹2,000 a transaction and ₹10,000 a month |
| Gift PPI | Issued as a non-reloadable gift instrument | Up to ₹10,000 |
| PPI-MTS | No KYC needed | Transit, toll and parking payments only |
Cash loading into any PPI is capped at ₹50,000 a month, within the PPI’s overall limit. Every PPI must stay valid for at least one year from the last loading or reloading.
Documents required
Company documents
- Certificate of incorporation
- MoA covering PPI issuance
- Latest audited balance sheet
- Shareholding pattern and FDI details, if any
Net worth and people
- Chartered accountant’s certificate of net worth in RBI’s format
- Directors’ declarations for the fit-and-proper check
- Profiles and KYC of directors and promoters
Business and systems
- Form A application
- Business plan and product details
- KYC/AML, grievance and information security policies
- Escrow bank and settlement arrangement
How it works
Check eligibility and capital
We check the MoA, ownership and audited net worth against the ₹5 crore entry test, and flag any gap early.
File Form A with RBI
We prepare Form A with the fee and annexures under the Payment and Settlement Systems Regulations, 2008, and submit it to RBI’s Department of Payment and Settlement Systems. Gaps in the annexures only bring queries and delay, so we check each one before filing.
Clear RBI’s checks for in-principle approval
RBI screens eligibility, runs the fit-and-proper check and reviews customer service and security. If satisfied, it grants in-principle approval, valid for six months.
Build the platform and pass the system audit
Here is the catch: you have six months to build, get audited and submit a satisfactory System Audit Report. A one-time six-month extension is possible. In practice, the technology build is what usually runs late, so we start the audit planning on day one.
Receive the CoA and launch within six months
RBI issues the final Certificate of Authorisation. You must start business within six months of it.
Timelines
Finish the in-principle stage in six months
The System Audit Report must reach RBI within six months of in-principle approval, or the approval lapses.
Reach ₹15 crore by the third year
By the end of the third financial year from final authorisation, net worth must be at least ₹15 crore, maintained at all times after that.
Report changes within 15 days
A takeover or change in management must be reported to RBI within 15 days, with declarations from the new directors.
What happens if you issue PPIs without it
You face prosecution
Section 26 of the PSS Act provides imprisonment of up to ten years, a fine of up to ₹1 crore, or both, with up to ₹1 lakh for each day the breach continues.
A rejection costs you a year
If an application is rejected or a CoA is revoked or surrendered, a cooling period of one year applies before a fresh application.
Your partners walk away
Partner banks and card networks will not work with an unauthorised issuer, and customers’ balances get stuck.
Frequently asked questions
What net worth is needed for a PPI licence?
A non-bank needs a minimum positive net worth of ₹5 crore at the time of applying, as per its latest audited balance sheet. By the end of the third financial year from final authorisation, it must reach ₹15 crore and keep it at all times. A chartered accountant certifies the figure in RBI’s format. For an authorisation in March 2026, for example, ₹15 crore is due by 31 March 2028. We help you plan the capital in stages.
Can a PPI issuer also act as a payment aggregator?
Yes, but the money must never mix. The PPI Directions bar co-mingling of PPI funds with funds from any other activity, such as payment aggregation, a payment gateway or acting as a bank’s business correspondent. A payment aggregator business needs its own RBI authorisation with a ₹15 crore net worth to apply. Keep separate escrow accounts and separate books, and both businesses can run side by side.
How long is the in-principle approval valid?
In-principle approval is valid for six months. Within that time you must submit a satisfactory System Audit Report so RBI can grant the final CoA. A one-time extension of six months is available; otherwise the approval lapses. After the final CoA, business must start within six months. We plan the technology build and audit around these dates from day one.
What are the limits on a small PPI?
A small PPI with cash loading allows loading of up to ₹10,000 a month and ₹1,20,000 a financial year, with no more than ₹10,000 outstanding. It needs only a mobile number verified by OTP and a self-declaration. It must be converted to a full-KYC PPI within 24 months of issue, or no further credit is allowed. These limits keep risk low while the customer completes KYC.
Can a full-KYC wallet allow cash withdrawal?
Yes, within limits. A full-KYC PPI can hold up to ₹2,00,000, and cash withdrawal is allowed up to ₹2,000 per transaction within an overall ₹10,000 a month. Cash loading into any PPI is capped at ₹50,000 a month. Non-bank issuers follow the same withdrawal limits as banks. We help you build these rules into your product and policies.
Where must a non-bank issuer keep customer money?
In an escrow account with any scheduled commercial bank. The balance must never fall below the value of outstanding PPIs and payments due to merchants. An auditor certifies the escrow position, and the certificate goes to RBI with your other returns. We set up the controls and the certificate routine for you.
Is the PPI authorisation valid for life?
Yes, broadly. Under the Directions, a CoA is now granted to payment system operators on a perpetual basis. RBI can still revoke it for non-compliance, and a takeover or change in management must be reported within 15 days. If an application is rejected or a CoA revoked or surrendered, a one-year cooling period applies. Keep your compliance clean and the licence stays with you.
Can foreign nationals use Indian PPIs?
Yes. The Directions allow PPIs to be issued to foreign nationals and NRIs visiting India, after physical verification of passport and visa, starting with travellers from G-20 countries. These PPIs can be linked to UPI for paying merchants. Foreign exchange conversion is done through authorised entities. If this is your product, we build it into the application.
How are customer complaints handled?
Every PPI issuer must have a board-approved grievance policy, a nodal officer and a clear escalation path. Complaints should be resolved preferably within 48 hours, and never later than 30 days. Issuers also send RBI quarterly reports on complaints, by the 10th of the month after each quarter. We draft the policy and the reporting templates so your support team knows exactly what to do.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
The main cost is the capital: ₹5 crore of positive net worth to apply and ₹15 crore by the end of the third financial year. Budget also for the System Audit Report and your platform build.
Ready to begin?
Tell us what your wallet or card will do and your current net worth, and we will map the PPI licence route for you.