finpeel Answers · India · updated 2026-08-14

Do closed-loop wallets require RBI approval in India?

A genuinely closed-system wallet usable only for the issuer’s own goods or services does not require RBI payment-system approval or authorisation under the PPI framework. If the wallet is usable with third parties, it may no longer qualify for that exception.

The commercial name “closed-loop” is not enough; the actual acceptance network and redemption/transfer functionality must meet RBI’s closed-system description.

Re-test the perimeter whenever new merchants or transfer features are added.

Regulator: Reserve Bank of India (RBI)

Primary sources: RBI — Master Direction on Prepaid Payment Instruments · RBI — FAQs on Prepaid Payment Instruments

Directional — not legal advice. Verify with the regulator before committing.

Read on finpeel.com · All answers · Check the licensing perimeter