Why in news?
- According to the RBI, banks and non-banks authorised to issue prepaid payment instruments (PPIs) can issue rupee-denominated full-KYC PPIs to foreign nationals and NRIs visiting India.
Key facts about prepaid payment instruments (PPIs)
- What is it? PPIs are instruments that facilitate the purchase of goods and services, including financial services, remittance facilities, etc., against the value stored on such instruments.
- Examples: Prepaid instruments can be issued as smart cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers and any of the instruments used to access the prepaid amount.
- PPIs that can be issued in India are classified as.
- Closed System PPIs: These PPIs are issued by an entity for facilitating the purchase of goods and services from that entity only and do not permit cash withdrawal. The operation of such instruments doesn’t require approval by the RBI.
- Semi-closed System PPIs: These PPIs are issued by banks (approved by RBI) and non-banks (authorized by RBI) for the purchase of goods and services at merchant locations which have a specific contract with the issuer to accept the PPIs as payment instruments.
- Open System PPIs: These PPIs are issued only by banks (approved by RBI) and are used at any merchant for the purchase of goods and services. Cash withdrawal at ATMs / Point of Sale (PoS) terminals / Business Correspondents (BCs) is also allowed through such PPIs.
Q1) Who is an NRI?
A ‘Non-resident Indian’ (NRI) is a person resident outside India who is a citizen of India. An NRI is classified as an individual who has gone out of India, or who stays outside India for employment or for carrying on business or any vocation.