New Delhi, India — April 26, 2026
The Reserve Bank of India (RBI) has released a comprehensive draft framework aimed at tightening regulations around digital wallets and prepaid payment instruments (PPIs), in a move designed to enhance customer protection and reduce fraud risks across India’s rapidly growing fintech ecosystem.
The proposed rules introduce stricter eligibility criteria for non-banking entities, mandate escrow safeguards for customer funds, and establish clearer operational guidelines to ensure transparency and accountability in digital transactions.
Minimum Net Worth, Escrow Account Now Mandatory
Under the draft norms, non-bank entities seeking to operate digital wallet or prepaid card services must maintain a minimum net worth of ₹5 crore at the time of application. Additionally, these firms will be required to increase their net worth to ₹15 crore within three years of receiving authorization.
A key safeguard introduced is the compulsory maintenance of customer funds in a separate “rupee escrow account” held with a recognized commercial bank. This measure is aimed at ensuring that users’ money remains protected even in the event of operational or financial issues within the company.
Banks Get Easier Entry into Wallet Services
The RBI has also streamlined the process for banks. Institutions already issuing debit cards can now directly launch prepaid wallets or cards by notifying the Payment and Settlement Systems Department (DPSS), eliminating the need for additional approvals.
The central bank has invited public feedback on the draft guidelines until May 22, 2026, signaling a consultative approach before final implementation.
Wallet Limits Defined for Safety and Convenience
To balance usability with risk control, the RBI has proposed clear limits on wallet balances and transactions:
- General-purpose digital wallets: Up to ₹2 lakh balance
- Monthly cash deposit limit: ₹10,000
- Forex-linked wallets: Withdrawal limit of ₹5 lakh per month
- Transit (travel) wallets: Maximum balance capped at ₹3,000
These limits are intended to minimize misuse while maintaining convenience for everyday users.
Mandatory Transparency, Instant Refunds for Failed Transactions
The draft places strong emphasis on user rights and transparency. Wallet providers must clearly disclose all fees, terms, and validity conditions in simple language, including Hindi, English, and regional languages.
Importantly, the RBI has proposed a strict rule for failed transactions: any unsuccessful, canceled, or erroneous transaction must be reversed immediately to the user’s wallet.
Even if the refund causes the wallet balance to exceed the prescribed limit, companies will still be obligated to process the refund without delay—offering significant relief to consumers.
Industry Impact and Next Steps
The proposed regulations are expected to significantly impact fintech firms, especially smaller non-banking players, by raising compliance requirements. However, they also aim to strengthen trust in digital payments—a sector that continues to see exponential adoption across India.
Stakeholders, including fintech companies and the general public, have until May 22 to submit feedback before the RBI finalizes the framework.
