Prepaid payment instrument companies have approached the Reserve Bank of India seeking relief from proposed restrictions on wallet transactions, warning that the measures could adversely affect business growth and slow the momentum of digital payments in the country. According to reports from NDTV Profit, the RBI has proposed capping monthly debit transactions through PPIs at ₹2 lakh, limiting person-to-person transfers to ₹25,000 per month, and reducing the cash-loading limit to ₹10,000 from the current ₹50,000. The proposed changes come as the banking sector shows strong fundamentals with Motilal Oswal expecting the banking system credit to grow at a CAGR of around 14% over FY26-28, supported by robust demand across corporate, retail, and MSME segments.
Executives at several PPI firms said the proposed limits may make wallet products less attractive for users who rely on them for frequent and higher-value transactions. As reported by NDTV Profit, they cautioned that the move could hurt transaction growth and weaken the business case for wallet operators. The industry has also expressed concern that the tighter norms could discourage investments in customer onboarding processes, including video-based know-your-customer verification, as firms reassess the economics of acquiring and servicing users under the proposed framework. This regulatory uncertainty comes as the broader banking sector shows positive momentum, with Motilal Oswal projecting private banks to deliver a stronger ~21% CAGR, significantly outpacing PSU banks.
Major PPI operators include Amazon Pay, Navi, Mobikwik, PhonePe, Pine Labs and Razorpay. According to NDTV Profit, industry representatives have urged the central bank to adopt a graded implementation strategy rather than introducing the restrictions across the board. They have proposed that the RBI first conduct a pilot programme involving a limited set of users to assess the impact of the measures on wallet usage and transaction volumes. The PPI sector's concerns align with broader banking sector optimism, as Motilal Oswal maintains constructive views on major banks including ICICI Bank, HDFC Bank, SBI, and AU Small Finance Bank.
According to NDTV Profit, Abhishek Jha, fellow and vertical lead, corporate advisory, Pahle India, stated that "As policymakers consider changes to the framework, it is important that regulatory measures remain proportionate and risk-based, balancing consumer protection with accessibility, innovation and ease of use. A phased and evidence-based approach can help strengthen the ecosystem while preserving the benefits that have driven widespread adoption." Industry participants said they remain engaged with the regulator and are hopeful that concerns around business viability and digital payment growth will be taken into account before the norms are finalised. This regulatory engagement occurs as the banking sector benefits from improving macro conditions and management commentary turning increasingly constructive.
