RBI's Major Move! Digital Wallets Can Now Hold Balances Up to ₹2 Lakh; Draft of New Rules Released.

The Reserve Bank of India (RBI) has drafted a new set of regulations for Prepaid Payment Instruments (PPIs)—specifically digital wallets and cards. A PPI is a payment system wherein funds are pre-loaded and subsequently utilized to make payments. These instruments have been categorized into various types, such as General PPIs, Gift PPIs, Transit PPIs (for travel), PPIs for NRIs, and other specialized-use PPIs. The primary focus of these new regulations for digital wallets and cards is to enhance transaction security and to strengthen the processes for refunds and grievance redressal. The RBI has also invited public suggestions regarding these proposals until May 22.

According to the draft regulations, banks authorized by the Reserve Bank of India (RBI) to issue debit cards will be permitted to issue PPIs simply by notifying the Department of Payment and Settlement Systems (DPSS). Additionally, non-banking entities may also launch this service, subject to obtaining prior approval from the RBI.

**General Purpose PPIs**

The RBI has formulated a draft framework of new rules for PPIs—encompassing digital wallets and cards. This framework proposes the establishment of clear guidelines aimed at bolstering transaction security, streamlining refund procedures, and facilitating the resolution of grievances. PPIs have been classified into distinct categories. For General Purpose PPIs (such as e-wallets), the maximum permissible balance at any given time is capped at ₹2 lakh; furthermore, cash-based loading into these instruments is restricted to a maximum of ₹10,000 per month.

**Transit PPIs**

According to a report by *Navbharat Times*, the RBI's draft proposal suggests setting a maximum value limit of ₹10,000 for 'Gift PPIs' and a limit of ₹3,000 for 'Transit PPIs' (such as metro or bus cards). The RBI states that the existing regulations have undergone a comprehensive review with the dual objectives of enhancing transaction security and fostering the long-term growth of the PPI ecosystem. Consequently, this new draft framework has been released, and public suggestions regarding the proposals are being solicited until May 22, 2026. Regulations for Non-Banking Companies

According to the draft, banks authorized to issue debit cards may issue PPIs (Prepaid Payment Instruments) by providing intimation to the RBI's Department of Payment and Settlement Systems (DPSS) in Mumbai. Furthermore, non-banking companies will also be eligible to issue PPIs after obtaining approval from the RBI. However, certain conditions have been stipulated for non-banking companies. They are required to maintain a minimum net worth of ₹5 crore and submit a certificate to this effect from their auditor; only upon fulfilling these requirements will they be permitted to issue PPIs.

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