In a move that will increase convenience of payment for users of public transport, the Reserve Bank of India has proposed that mass transport systems (MTS) such as Metros be allowed to issue a seperate class of semi-open prepaid payment instruments (PPI).
“In the process of migration of cash payments to electronic payments, the migration of micro and small value cash payments can play a significant role in achieving the vision of less-cash society. One such area, where a large number of small value cash payments take place relates to mass transit systems,” RBI said in a notification on Thursday. The PPI-MTS will contain an Automated Fare Collection application related to the transit service and can be used at other merchants as well whose activities are allied to or are carried on the premises of the transit system only.
These instruments can be issued only by mass transport systems such as Metros, and other public transport systems.
The prepaid instruments will have validity of six months from the date of issue and ‘reloadable’. The balance of the instruments cannot exceed R2,000 at any point in time, RBI said. Also, no refund can be given from these instruments and withdrawal of cash will not be allowed, said the central bank.
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