Scheduled Banks & Non-banking Financial Institutions:

These institutions have to get previous permission from the Reserve Bank of India (RBI) for getting the license.

New Incorporations:

Those newly formed firms that do not have an audited financial statement must receive a certified Chartered Accountant certificate declaring their current net worth and have to file a provisional balance sheet.

A company holding Foreign Direct Investment/ Foreign Institutional Investment:

As specified by the FDI policy guidelines, these companies must have minimum capital.

All other organizations:

must, in conjunction with their most recent audited balance sheet, have a minimum net worth of INR 25 Crore.

The company incorporated under Companies Act:

A private or public company incorporated under the Companies Act 2013 or 1956 can only do this prepaid wallet issuing business if it is approved in the MOA by its object clause.

STEP 1:

Business incorporation under the Company Act, 2013 with key objects consistent with that of a prepaid payment instrument.

STEP 2:

Preparation and filing of the Payment Wallet License Application in Form A with payment of an appropriate fee as needed by the Regulations of the Payment and Settlement System, 2008.

STEP 3:

In order to ensure the correctness of the application and the attachments submitted and the fitness of the Company and its promoters and directors, the application thus filed is subject to the initial review of the application by the RBI.

STEP 4:

The designated office of the Reserve Bank of India issues an ‘in-principle’ approval valid for 6 months subject to completion of the initial scrutiny to the satisfaction of the RBI.

STEP 5:

A Systems Audit Report shall be mandatory to be submitted to RBI by the organization receiving the ‘in-principle’ within those six months, otherwise, the in-principle approval shall be considered to have expired after 6 months. There is a provision for such an applicant to seek a one-time extension of six months, which is to be accepted only if there is a legitimate explanation for the delays incurred. Based on the reasons mentioned, the RBI has the discretion to approve or reject such extension requests.

STEP 6:

If the RBI finds that the particulars and facts presented by the applicant in the application are sufficient and, following the respective provisions. The RBI shall issue the Registration Certificate to the applicant within six months of its initial approval. However, in the absence of a certificate of registration, the in-principle approval shall expire at the end of the six months. The registration certificate issued by the RBI is valid for 5 years and is subject to periodic examination.

Entities Issue Prepaid Payment Systems

All organizations involved in issuing closed system PPIs are exempt from the RBI’s guidelines and will not seek approval from Apex Bank. However, they need to meet the following conditions for the issuance of payment metals:

1. The maximum cost of a closed PPI system will be Rs 5000 / -;
2. These prepaid payments will not be used to purchase other prepaid payment tools;
3. The amount collected under this scheme will be waived from the delivery of the delivery, provided that the remaining amount of payment instruments does not exceed the Rs 50 lakhs or 10% of the NOF (General Funds) of suppliers, whichever is less;
4. Any business operating in the issuance of these prepayment payments needs to notify the RBI (Reserve Bank of India) when those plans come into effect;
5. Those organizations also need to submit an annual financial statement to the State Bank representing the total amount and the remaining amount of instruments issued during that period.

Foreign Exchange Prepaid Payment Instruments

All entities authorized under the FEMA (Foreign Exchange Management Act), 1999 to issue prepaid foreign currencies are not subject to minimum monetary requirements. However, these payment instruments can only be used for the current account approval.

Mobile Prepaid Instrument

The conditions to be met for the release of prepaid steel from RBI guidelines are as follows:

1. Except for the amount of talk time, the use of that prepaid device will be restricted to purchasing only those digital services or content that can be used on mobile phones.
2. Mobile payment instruments may not be used for the purchase of other goods or services.
3. These prepaid instruments cannot be converted into cash.