Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:
- Mr. Tushar Trivedi, Former Senior Executive Vice President Kotak Mahindra Bank
- Mr. Ramesh Ganesan, President, Transaction Banking, Indusind Bank
- Mr. Viswadeep Chavali, Vice President, Equitas Small Finance Bank
- Mr. Raj K Prasad, Head – GCC & CEO, DIFC Branch at Axis Bank
- Mr. Sunil Kulkarni, Joint Managing Director, Oxigen Services (India) Pvt Ltd
- Mr. Rajiv Rai, former Chief Digital Officer at Edelweiss
- Mr. P B Prakash, Head Financial Institutions Group, Indusind Bank
- Mr. Mohammad Hassan, Project Management Consultant
- Mr. Raghu Veer Dendukuri, Product Owner, Intandemly
- Mr. Shashank Chowdhury, Former Executive Vice President-Inclusion Initiative, Vakrangee Software Ltd
- Mr. Ashutosh Khetan, AVP Product & Portfolio (Payments), HDFC Bank
- Mr. Vikas R Panditrao, Co-founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
- Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous
RBI released a circular requiring the banks to get PPI license to offer semi or open-loop system. Thus, FIAKS community discuss why should the Banks need to separately again apply for PPI License?
First, let’s have a glance at what this PPI license is? Pre-paid Payment Instruments (PPI) license allows buying of goods & services including financial services, remittance facilities, etc, alongside the value stored on such instruments. PPI license that can be issued are of 3 types:
- Closed system PPIs
- Semi-closed system PPIs
- Open system PPIs
Open wallets allow you to buy goods & services and also withdraw cash at ATMs or banks and transfer funds. Semi-closed wallets do not allow cash withdrawal or redemption by the holder. Closed-loop wallets help to add money into a user account which is linked to payment device of a company.
Here are views of some of the community members regarding the raised query:
- Simple approval like any other product launch should suffice especially for Universal Banks or Small Finance Banks or Payments Bank. Banking license should ideally include offering all these products rather than going for separate licensing for each.
- RBI should give a general license to carry out all activities permitted under Banking Regulations Act to all universal banks meeting prescribed qualifications unless they are specifically barred by RBI to do so (as they did in case of axis bank bullion business). But, again on the other hand that will make life easy for banks and dilute the bureaucratic sway off RBI. So, they will want banks to queue up for these approvals one at a time.
- One of the members opined PPI is nothing but a different kind of current account hence bank ONLY needs to inform RBI.
Now, let’s have a look at the exact Extract of RBI circular:
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