{"id":11526,"date":"2022-08-04T09:08:30","date_gmt":"2022-08-04T09:08:30","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=11526"},"modified":"2022-08-04T09:08:31","modified_gmt":"2022-08-04T09:08:31","slug":"ppi-license-eligibility-requirements","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/ppi-license-eligibility-requirements\/","title":{"rendered":"PPI License Eligibility Requirements: Documents and Process"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a54bac139d61\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a54bac139d61\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/ppi-license-eligibility-requirements\/#What_are_prepaid_payments_instruments\" title=\"What are prepaid payments instruments?\">What are prepaid payments instruments?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/ppi-license-eligibility-requirements\/#PPI_License_Eligibility_Requirements\" title=\"PPI License Eligibility Requirements \">PPI License Eligibility Requirements <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/ppi-license-eligibility-requirements\/#Documents_required_for_PPI_license\" title=\"Documents required for PPI license:\">Documents required for PPI license:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/ppi-license-eligibility-requirements\/#The_process_to_apply_for_a_PPI_license_non-bank_entities\" title=\"The process to apply for a PPI license (non-bank\nentities):\">The process to apply for a PPI license (non-bank\nentities):<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/ppi-license-eligibility-requirements\/#Conclusion\" title=\"Conclusion:\">Conclusion:<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_prepaid_payments_instruments\"><\/span>What are prepaid payments instruments?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Post the demonetization blues, there has\nbeen a significant increase in digital transfers and cashless transactions.\nPrepaid payment instruments are instruments which can be used to avail goods or\nservices up to the quantum of value stored in them. The holder of the prepaid\ninstrument can pay for the value stored in such instrument through a card, cash\nor through the bank account. PPIs are issued in various forms; these are mobile\nwallets, gift cards, vouchers, smart cards etc. This article shall focus on PPI\nLicense Eligibility Requirements: Documents and Process<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"PPI_License_Eligibility_Requirements\"><\/span>PPI License Eligibility Requirements <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Capital Requirements: The capital needed to meet the PPI license eligibility requirements in the case of <ul><li>Banks: The Reserve Bank of India has not mentioned a specific capital requirement for banks or NBFCs registered with it. Banks and NBFCS need RBI&#8217;s permission to issue <strong><a href=\"https:\/\/swaritadvisors.com\/music-license-from-ppl\" class=\"text-primary\">PPIs<\/a><\/strong><\/li><li>Other entities: Other entities are required to maintain a net worth of Rs.25 crores per the last audited balance sheet to seek approval from the Reserve bank of India to start a PPI business.<\/li><\/ul><\/li><li>Net worth Capital shall include i) Paid-up Equity capital, ii) Free Reserves, iii)  Preference shares, iv) Share premium account, and v)Capital reserves representing surplus.<\/li><li>The <strong><a class=\"text-primary\" href=\"https:\/\/swaritadvisors.com\/nbfc-registration\">NBFC<\/a><\/strong> and Banks must obtain permission from the Reserve Bank of India before issuing prepaid payment instruments. Note: the entities must also comply with the norms for net worth and minimum capital requirement.<\/li><li>For entities apart from banks, NBFCs must maintain a minimum net worth of \u20b9 5 crores. They shall operate as semi-closed PPIs. These entities need to have a net worth of \u20b9 15 crores by the end of 3rd financial year.<\/li><li>All the  Entities that need to make an application to the Reserve Bank of India to seek approval for PPI business.<\/li><li>A  certificate ensuring sufficient funds and net worth along with a      provisional balance sheet audited by a Chartered Accountant must be submitted by a newly incorporated entity.<\/li><li>The entity must be registered as a company under <strong>the Companies Act 1956 or companies Act 2013<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/ebooks.html\"><strong>[1]<\/strong><\/a><\/sup> to get the license from RBI.<\/li><li>The  Memorandum of Association of the Company must clearly specify the activity to operate as an issuer of prepaid payment instrument.<\/li><li>As per PPI license eligibility requirements, an entity must ensure that they have complied with KYC, Anti-Money Laundering (AML), and Combating Financing of  Terrorism (CFT) guidelines.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_required_for_PPI_license\"><\/span>Documents required for PPI license:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following documents need to be\nsubmitted by an entity to fulfil PPI license eligibility requirements.<\/p>\n\n\n\n<ul><li>Name of the Issuer<\/li><li>Address proof of the registered\noffice<\/li><li>Certificate of incorporation<\/li><li>Memorandum of Association<\/li><li>Articles of Association<\/li><li>Declarations and other\ndocuments<\/li><li>Information regarding the\nmanagement of the company<\/li><li>The most recent audited balance\nsheet of the company.<\/li><li>Name and address of bankers<\/li><li>Any other document as required\nfrom time to time.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_process_to_apply_for_a_PPI_license_non-bank_entities\"><\/span>The process to apply for a PPI license (non-bank\nentities):<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The Non-banking entities should apply for approval from the reserve bank of India in the format prescribed in FORM-A as stated under the Payment and Settlement System Regulations<\/li><li>At first, the RBI shall check the applicant&#8217;s eligibility via preliminary screening.<\/li><li>Next, the RBI shall check whether the applicant meets the &#8220;fit and proper&#8221;criteria, and the entity&#8217;s management shall also be assessed. Feedback will be taken from regulators and various government authorities.<\/li><li>If the entity fails to meet the eligibility criteria, the applicant shall stand rejected, and the application fee will not be refunded.<\/li><li>The PPI License Eligibility Requirements states that an entity shall be judged on other factors not part of eligibility criteria like technology incorporations, customer services, overall efficiency, etc.<\/li><li>If all the criteria are met, the Reserve Bank of India will grant the entity an in-principal approval. This approval is valid for six months. The concerned entity must submit a system audit report during this period. If these are not submitted within time, then the in-principle will lapse automatically.<\/li><li>The applicant shall be given final approval to start their operations within the six months as mentioned earlier. However, if the approval is not granted during this period, then the authorization will lapse automatically.      <\/li><li>There is a provision through which the entity can make a written request for a one-time extension of 6 months to RBI, citing reasons for the delay.  However, the RBI has the right to decide whether to accept or reject this application for extension.<\/li><li>The certificate&#8217;s validity for authorization is 5-years from the date of issue. <\/li><li>The license needs to be renewed every by applying to the RBI 3 months before its expiration date. If not renewed on time, RBI has the right to accept or reject it.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Prepaid payment instruments have proved to\nbe an important tool for completing transactions. Many banks and financial\ninstitutions want to capitalize on this rising popularity and release their own\nprepaid payment instrument or incorporate them into their existing services.\nThe Reserve Bank of India has set the PPI License Eligibility Requirements for\nan entity to apply for the license of prepaid payment instruments. An entity\nmust comply with all the norms to obtain the certificate of authorization. The validity\nof this certificate is for six years and needs to be renewed periodically.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What are prepaid payments instruments? Post the demonetization blues, there has been a significant increase in digital transfers and cashless transactions. Prepaid payment instruments are instruments which can be used to avail goods or services up to the quantum of value stored in them. The holder of the prepaid instrument can pay for the value [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":11527,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[31],"tags":[1060],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11526"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=11526"}],"version-history":[{"count":5,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11526\/revisions"}],"predecessor-version":[{"id":11533,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11526\/revisions\/11533"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/11527"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=11526"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=11526"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=11526"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}