The restrictive regulatory framework for PPIs
By being too cautious, the Reserve Bank of India has failed to truly enable prepaid payment instruments
The Chinese have a saying, “Cross the river by feeling the stones." It is attributed to Deng Xiaoping and refers to moving ahead with reforms pragmatically and slowly. It is natural for regulators to take Deng’s teachings to heart, but it may be worth remembering that they do emphasize “crossing the river". In its recently notified regulatory framework for prepaid payment instruments (PPIs), however, the Reserve Bank of India (RBI) has simply chosen to admire the proverbial river from its banks. Coming on the back of much anticipation, the framework leaves much to be desired.