RBI warns non-banks for loading funds on prepaid wallets and cards

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This circular from the RBI will impact fintech players who offer credit lines to customers through their wallets via non-banking finance players.

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The Reserve Bank of India said, "The prepaid payment instruments (PPI)- master direction does not permit loading of PPIs from credit lines

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RBI said there are about 35 non-bank PPI issuers in India, which includes the likes of Amazon Pay, Bajaj Finance, Ola Financial Services, PayU Payments Pvt Ltd, etc.

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Many were using their Buy Now Pay Later (BNPL) scheme and their PPI license like loading customer wallets with credit and showing wallet balance.

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Fintechs’ financial services could face significant repercussions due to the new regulation. Banks would benefit from this, as they would be able to speed up card operations.

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All online buying in India works with a PPI payment. And, the fintech lending industry uses credit lines to get people credit through their wallets and works with a PPI.

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