wordpress blog stats
Connect with us

Hi, what are you looking for?

RBI bars prepaid wallets and cards from offering credit lines to customers

Non-banks issuing prepaid payment instruments (PPIs) like wallets and prepaid cards cannot offer customers a credit line, RBI said.

What's the news? Non-banks issuing prepaid payment instruments (PPIs) like wallets and prepaid cards cannot offer customers a credit line on these instruments, according to a non-public notification issued by the Reserve Bank of India (RBI) on June 20. Why does this matter? This move could severely affect Indian fintech start-ups like Slice, LazyPay, PhonePe, and Paytm, whose businesses involve issuing short-term loans to customers to refill their prepaid cards or wallets. It could also disrupt the burgeoning "buy now pay later" segment. Typically, these start-ups partner with banks and non-banking financial companies (NBFCs) to offer the cards and credit lines. On the other hand, the move could benefit credit card issuers like HDFC Bank and ICICI Bank as they will once again become the default option for customers seeking short-term credit. "We are evaluating this regulation and are committed to being on the right side of regulation in letter and spirit. We are working with our partner bank on this." — Slice founder and CEO Rajan Bajaj told MoneyControl https://twitter.com/deepakshenoy/status/1538956109306003456?s=20&t=q6MeLc85_M1zTpqzkaggGg What prompted RBI to issue this notification? RBI did not explicitly state why it issued this notification, but a recent surge in the number of fintech and neobanks offering credit lines might have nudged RBI to exercise caution. Notably, the notification does not introduce any new rule. According to RBI, the Master Directions on PPls (PPI-MD), which is the set of guidelines governing the issuance of PPIs, state: "PPls shall be permitted to be loaded / reloaded by cash, debit to a bank account,…

Please subscribe/login to read the full story.
Written By

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

Is open-sourcing of AI, and the use cases that come with it, a good starting point to discuss the responsibility and liability of AI?...

News

RBI Deputy Governor Rabi Shankar called for self-regulation in the fintech sector, but here's why we disagree with his stance.

News

Both the IT Minister and the IT Minister of State have chosen to avoid the actual concerns raised, and have instead defended against lesser...

News

The Central Board of Film Certification found power outside the Cinematograph Act and came to be known as the Censor Board. Are OTT self-regulating...

News

Jio is engaging in many of the above practices that CCI has forbidden Google from engaging in.

You May Also Like

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ