Recommendations for evidence-based, proportionate, and risk-based regulation that balances compliance with consumer convenience and innovation
FinTech BizNews Service
Mumbai, 20 May 2026: The Policy Consensus Centre (PCC) convened a high-level stakeholder consultation on Reserve Bank of India’s proposed Draft Master Direction on Prepaid Payment Instruments (PPIs), bringing together industry leaders, fintech policy experts, legal professionals, and payment ecosystem participants. The consultation focused on evaluating the economic, operational, and financial inclusion implications of the proposed framework for India’s growing digital payments ecosystem.
Stakeholders acknowledged the RBI’s intent to simplify and modernise the PPI regulatory architecture
however, they also expressed concerns that certain proposals, including transaction caps, restrictions on
wallet loading mechanisms, tighter cash loading limits, and mandatory expiry provisions, could
unintentionally increase friction for consumers, MSMEs, gig economy workers, and first-time digital
users who increasingly rely on PPIs for everyday financial management and low-cost digital transactions.
Speaking on this, Nirupama Soundararajan, Co-founder & CEO, Policy Consensus Centre, said, “PPIs
today are no longer merely digital wallets; they have evolved into critical financial infrastructure
powering everyday commerce, mobility, subscriptions, MSME transactions, and instant payouts across
India’s digital economy. Given the scale and diversity of their usage, it is important that the regulatory
framework evolves through wider stakeholder consultation and evidence-based assessment to fully
understand the operational and inclusion-related implications of the proposed changes.”
Badri Narayan Gopalakrishnan, Economist & Strategy Leader, added, “PPIs currently act as an
important stabilizing mechanism by enabling controlled spending, low-cost transactions and quick access
to funds, especially during periods of economic and geopolitical uncertainty. Introducing additional
friction at this juncture could disproportionately impact first-time digital users, low-income groups and
MSMEs who rely on wallets for everyday financial management.”
Ram Rastogi, Chairman, FinTech Association for Consumer Empowerment (FACE), said, “Given the
evolving digital payments ecosystem and the current economic uncertainties, the finalisation of these
guidelines should be extended by at least 6–12 months to allow for deeper industry consultations, data-
backed assessment, and a smoother transition that does not disrupt financial inclusion or innovation.”
Dr. Raghav Pandey, Director, Centre for Regulatory Studies, NLU Delhi, said “If the objective is
principle-based regulation, then the measures adopted must also remain proportionate.
Transaction caps and limits on PPIs risk creating unnecessary rigidity, particularly for users relying on wallets for
utility payments, small business transactions and everyday digital payments. Instead of restricting usage
through lower limits, the focus should be on better traceability, oversight and risk-based regulation.”
Adding to this, Sriram Subramanian, Founder & Managing Director, InGovern Research Services, said,
“PPIs have emerged as an important financial access tool for millions of consumers, especially for low
ticket payments, budgeting, and secure digital transactions. While stronger governance and
interoperability are welcome, any regulatory tightening must carefully balance compliance with
consumer convenience, innovation, and the need to preserve frictionless access for underserved and
digitally cautious users.”
The consultation concluded that the PPI framework should support innovation and financial inclusion
while avoiding unnecessary disruption to digital payments. Stakeholders called for wider consultations
and an extension of the draft guidelines timeline to allow deeper engagement with industry, MSMEs,
fintech companies, consumer groups, and legal experts, while ensuring that any regulatory changes are
gradual and practical.
