RBI doubles balance limit on digital wallets to Rs. 20,000 per month
The mobile wallet companies in India such as Paytm, MobiKwik and FreeCharge have seen steep rise in their business, post the demonetisation of Rs. 500 and Rs. 1000 notes. People are moving towards digital wallets amidst the cash crunch.
In a bid to reduce the ongoing cash crunch, Reserve Bank of India (RBI) has increased the existing balance limit on all digital wallets. RBI has doubled the balance limit on digital wallets to Rs. 20,000 per month. Prior to this, the limit was restricted to Rs. 10,000 per month.
A special dispensation has now been enabled for small merchants whereby PPIs issuers can issue PPIs to such merchants. While balance in such PPIs cannot exceed ₹ 20,000/- at any point of time, the merchants can transfer funds from such PPIs to their own linked bank accounts upto ₹ 50,000/- per month, without any limit per transaction. Merchants only need to provide a self-declaration in respect of their status and details of their bank account.
– Circular, RBI.
Additionally, merchants can also transfer up to 50,000 rupees every month from these prepaid wallets. This should simplify life for a lot of small merchants who do not yet possess eKYC documents. However, these new measures will be effective till December 30, 2016 only.
FreeCharge welcomes RBI’s decision to increase the limits on wallets to Rs 20,000 for users and to Rs 50,000 for merchant bank transfers. This doubling of limits will have an immensely beneficial impact for users and small merchants. Given the quantum jump in digital wallets usage in recent days, this increase in limits makes it easier for both users and merchants to shift more of their cash transactions to digital wallets.
– Govind Rajan, CEO, FreeCharge, India.
At a time, when people are facing cash problems, this move from RBI will certainly help a lot of merchants in India.