The Reserve Bank of India (RBI) has announced a comprehensive overhaul of the regulations governing prepaid payment instruments (PPIs) to tighten risk controls and promote interoperability. The draft master directions, which replace the 2021 norms, categorize PPIs into general purpose and special purpose types. General purpose PPIs, which include Full-KYC and Small PPIs, will have limits such as a maximum outstanding balance of ₹2 lakh (approximately $2,400 USD) for Full-KYC PPIs, while Small PPIs will be capped at ₹10,000 (approximately $120 USD). Special purpose PPIs will cater to specific uses like gifting and transit, with strict limits on their values. Notably, the use of PPIs for cross-border transactions is prohibited. The RBI has set a deadline for industry comments on these proposed regulations by May 22. The new framework aims to align PPI regulations with the latest Know Your Customer (KYC) norms and facilitate interoperability with card networks and the Unified Payments Interface (UPI).