The Reserve Bank of India (RBI) issued the Draft Master Direction on Prepaid Payment Instruments (PPIs), 2026 on 22nd April 2026 to consolidate and update the regulatory framework governing prepaid wallets and payment instruments in India. Stakeholders have been invited to submit comments on the draft direction through RBI’s consultation process by 22nd May 2026.  

The existing framework was last comprehensively updated in 2021. Since then, the digital payments ecosystem has evolved significantly with the expansion of UPI, interoperability mandates, and strengthened KYC/AML requirements.  

The draft direction seeks to rationalize PPI categories, enhance interoperability, strengthen risk management, and align non-bank issuers with bank-grade regulatory expectations, while continuing to support financial inclusion through tiered KYC structures.