PPI is a financial instrument. In this, public transport fare can be paid with the help of the deposited amount. Money can be deposited in PPI with the help of credit card, debit card, bank account.
Passengers who travel by public transport. There is good news for them. Now they will be able to easily pay for public transport like rail, bus, toll, parking. Reserve Bank of India (RBI) has given big relief. Banks and non-banking financial institutions have been allowed to issue PPI i.e. prepaid instruments for payment for various public transport systems. According to the Reserve Bank, this step has come into effect with immediate effect.
There will be other options besides cash payment
Payment under PPI or prepaid card is made first. Now those traveling by public transport will have options other than cash payment to pay the fare. They can pay for rail, bus, waterways, toll and parking services digitally through prepaid wallets and cards.
RBI has said in the notification that in order to provide security, better convenience, speedy payment and economical service of digital payment to the passengers, approval has been given to issue PPI capable of making payment for public transport system. Public transport systems across the country serve a large number of passengers every day.
What is PPI
PPI is a financial instrument. In this, payment for goods or services can be made with the help of the deposited amount. Money can be deposited in PPI with the help of credit card, debit card, bank account. PPIs will be issued by banks and NBFCs. Banks can issue PPI after getting approval from RBI. A PPI holder is a person who purchases PPI from a PPI issuer. At present there are three types of PPI in our country: Semi Closed System PPI, Closed System PPI and Open System PPI.
How will PPI help?
1. Banks/NBFCs will issue PPI after approval from RBI.
2. PPI will have automated fare collection application related to transit service, toll and parking.