Updated - March 06, 2023 at 09:15 PM.
File picture: Authorised banks and NBFCs can now issue rupee-denominated wallets to in-bound foreign travellers.
Q
What change has the RBI made to the rules governing issue of UPI-based payment instruments to NRIs recently?
A few months back, the Reserve Bank of India opened up the UPI channel of payments to non-resident Indians. To take this ahead by a step, it recently released an amendment to a master circular on prepaid payments instruments or PPIs, whereby the regulator has allowed in-bound travellers into India to use UPI.This means UPI will be available not just to NRIs, but all foreign travellers entering India.
Q
How would this work and for what purposes can these prepaid instruments be used?
Authorised banks and NBFCs can issue rupee-denominated wallets to in-bound foreign travellers. Such wallets may also be issued under co-branding arrangements with those permitted to deal with foreign exchange under FEMA. This facility can be accessed only through the wallet. The regulator allows a fully KYC compliant wallet to hold up to ₹2 lakh and this amount is extended to the travellers also.
However, the wallet can be used only to make merchant payments for goods and services. It cannot be used to transfer money. Hence, the possibility of an NRI loading Indian currency in the UPI and transferring it to his/her relatives in India is not possible. The wallet can be loaded against cash or by swiping a credit card at the kiosk.
How is this facility different from UPI allowed for NRIs?
The key difference is that this is a pre-paid instrument, whereas UPI for NRIs is tagged to fully KYC compliant NRO/NRE accounts. NRIs will have to link their bank accounts to their non-Indian mobile phone number to avail of the service and, hence, every time UPI is used, money is directly debited from their bank accounts. With the former being a wallet, unutilised money can be repatriated back to the customer, whereas in the latter case the need for the same doesn’t arise.
Q
Why is this facility limited to G20 countries?
With India holding the G20 presidency, the facility is open only to travellers from G20 countries as a test case. Also, only in-bound passengers in select international airports — namely Bengaluru, Mumbai and Delhi — can avail of the facility. As the product gathers acceptance, more airports are likely to be added to the list and eventually to travellers from more countries.
Q
Will the issuance of the PPI be instantaneous? Will any documents have to be submitted for KYC purpose?
As a part of KYC, the passport and visa of the customer will be verified before issuing the PPI. Once verified, the PPI will be issued across-the-counter and the customer could immediately load cash into the wallet.
Q
Doesn’t limiting this to passengers coming through select airports inconvenience NRIs travelling through other airports?
Yes, it does. However, since the objective is to promote the G20 nations currently, the facility is being extended only to travellers from these countries. Likewise, there are forex and security related aspects involved, and hence the regulator’s intent to test it in high-traffic international airports, before it is extended to more airports.
