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Prepaid Payment Instruments (PPIs)

  • Published
    18th Sep, 2021

GS-III: Economy

  • Inclusive Growth

The Reserve Bank of India has recently issued Master Directions on Prepaid Payment Instruments (PPIs) in exercise of the powers conferred under Section 18 read with Section 10(2) of the Payment and Settlement Systems (PSS) Act, 2007.

Prelims question:

With reference to Prepaid Payment Instruments (PPIs), consider the following statements:

  1. PPI’s facilitate buying of goods and services, including the transfer of funds, financial service and remittances, against the value stored within or on the instrument.
  2. Presently, setting up and operating payment systems for PPIs is beyond RBI’s regulation.

Which of the above statements is/are incorrect?

  • A.
  • B.
  • C.
  • D.

Mains Question:

The digital payment ecosystem has evolved and seen robust growth in India, but its impact has not been the same on everyone. Analyze. (250 Words)


  • Introduce by giving a statistic on digital payment adoption in India. Give few examples of new modes of digital payments like PPI, UPI, etc.
  • Discuss why digital payment’s spread has been uneven like the rural-urban digital divide, lack of financial literacy, etc.
  • Enumerate efforts made by the government in promoting digital payments
  • What more needs to be done and Way forward
  • Conclusion

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