Mumbai: The Reserve Bank on May 28 issued draft guidelines for pre-paid payment instruments to be used in mass-transit systems which will also enable shopping inside the transport hubs. "One area where a large number of small-value cash payments take place relates to mass-transit systems. Therefore, based on a review, it has been considered necessary to issue additional guidelines for a new category of prepaid payment instruments," the central bank said.
The 'semi-closed' prepaid instruments will be issued by the mass-transit operators like the Delhi Metro, and will be regulated under the Payment and Settlement Systems Act, 2007. Such instruments should help in automated fare collection and may also be used at other merchants who "are allied to or are carried on within the premises of the transit system only," the draft guidelines said. The responsibility of getting the merchants on board will be of the operator. Minimum validity for the PPI-MTS (prepaid payment instrument for mass-transit system) will be six months.
The know-your customer (KYC) requirements for issuing the instruments have been left for the issuer to decide. These instruments can be reloadable but the balance in the card should never exceed Rs 2,000, the guidelines say. No cash withdrawal or refund will be permitted using these instruments. Rules of escrow arrangement, customer grievance redressal mechanism, agent/ merchant due diligence, reporting and MIS requirements shall also be applicable to these instruments.
RBI executive director G Padmanabhan had announced recently that the central bank was in the process of finalising these guidelines. The guidelines come at a time when mass-transit systems like metro and bus rapid transport systems are coming up in several large cities. Comments and feedback on the draft guidelines have to be given before June 15.
