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Consider the following statements regarding Pre-paid Payment Instruments (PPIs) in India:
1. These are payment instruments that facilitate the purchase of goods and services.
2. Only those companies incorporated in India can issue PPIs in India.
3. These instruments do not permit cash withdrawal or redemption.
Which of the statements given above is/are correct?
  • a)
    1 and 2 only
  • b)
    2 and 3 only
  • c)
    1 only
  • d)
    1, 2 and 3
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Consider the following statements regarding Pre-paid Payment Instrumen...
The correct answer is: (d) 1, 2 and 3.
All of the statements given regarding Pre-paid Payment Instruments (PPIs) in India are correct.

Statement 1: These are payment instruments that facilitate the purchase of goods and services.

Pre-paid Payment Instruments (PPIs) are payment instruments that enable individuals to make payments for goods and services without the need for a bank account or credit card. They are often used in situations where traditional payment methods may not be available or convenient, such as online transactions or transactions in remote areas.
Statement 2: Only those companies incorporated in India can issue PPIs in India.

This statement is correct. According to the Reserve Bank of India (RBI), only companies incorporated in India are permitted to issue PPIs in India.
Statement 3: These instruments do not permit cash withdrawal or redemption.

This statement is also correct. PPIs are not designed to be used for cash withdrawal or redemption. They are intended for use as a means of payment for goods and services, and do not typically allow for the withdrawal or redemption of cash.
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