Non-banks cannot load credit lines into prepaid payment instruments: RBI to fintechs
- 4750
- 50
-
- Last Comment
https://www.moneycontrol.com/news/business/non-...
The notification was addressed to âAll Authorised Non-bank Prepaid Payment Instrument (PPI) Issuers.â According to multiple sources, the notification was sent to non-bank PPI issuers, including fintech players.
The immediate impact of this clarification is unclear; however, Slice, Uni, PayUâs LazyPay, KreditBee etc. also extend credit through prepaid co-branded cards. But the key issuers of these cards are banks like SBM Bank India, RBL Bank among others.
- Sort By
I think lazypay started converting limit to secured fds. They are asking to accept the new t&cs. I didnât read it yet but anyone who is more into banking background please explain.
same, whatâs in lazypays new terms?
Anyone who can explain this is simpler terms ?
Any entity that is not a bank canât issue loans on a name of a person and give them a wallet/prepaid card to use that money from. Like slice gives you a prepaid card with a limit and behind the scenes that limit is actually recorded as a loan you took from them.
So what will they do now?
If it doesnât get reported people might not pay back. 
Restrictions only on Prepaid cards via credit lines? In the case of OlaMoney, prepaid card will remain functional (via wallet balance) even if we close postpaid accounts
Seems to be in line with this recent statement of RBI governor.
https://timesofindia.indiatimes.com/business/in...
MUMBAI: Reserve Bank of India (RBI) governor Shaktikanta Das has said that the presence of BigTech firms in financial services poses risks around competition and data privacy. Das also said that the RBI would take stringent action against any regulated entity whose agents used foul language during the recovery of loans.
Speaking at a summit on banking, financial services and insurance (BFSI) in Mumbai, Das said that companies â whether from e-commerce, social media & search engine platforms, ride-hailing and similar businesses â have started to offer financial services in a big way on their own or behalf of others. âThese companies have an enormous amount of customer data, which has helped them offer tailored financial services to entities and individuals lacking credit history or collateral. Even the banks and other lenders are sometimes utilising platforms provided by fintech companies in their internal processes for credit risk assessment,â said Das.
âBut such loans could create systemic concerns like over-leverage and inadequate credit assessment, and authorities and regulators have to strike a fine balance between enabling innovation and preventing systemic risks,â said Das.
I think this is only for Non-bank PPIs.
Only wallets or slice etc also?
If any news has RBI in it then it must be some bad newsÂ
This will surely hit the big fraud that is Dhani.
The way I understand it, it won't affect Slice, Uni, Lazypay.
But it will affect Dhani, Mobikwik wallet which is a PPI "extended" by ZIP, Paytm Postpaid etc.
What the RBI seems to want to do with this move is protect customers who think XYZ service is a pre-paid wallet but when the wallet limit is exceeded by expenditures, it automatically extends into credit lines. That's the way Dhani the fraud, Mobikwik with ZIP and Paytm wallet with Postpaid do it. I think they will have to keep their credit lines/loans separate from wallets - similar to how Amazon Pay Later is different and distinct from Amazon Pay wallet/balance. Or Flipkart Pay Later is different from gift voucher balance. Amazon doesn't automatically use Pay Later if you are out of Pay balance. This is a good thing.
The others (Slice, Uni) are pure credit lines as I understand?
But I could be completely wrong here to understand it.
Dear Customer, as per recent RBI guideline, the provision of using Postpaid+ balance on your Ola Money card / wallet has been disabled with immediate effect. You may continue using the card with your wallet balance.
"@abhishek012":https://www.desidime.com/users/676025 suggests you rupay infinite world elite card as LTF 
Paytm postpaid should b banned. I didn't get any reminder on last day of bill payment of 12K and they charged 300 the next day.. đĄÂ
Wow I'm very happy. This step was much needed.