The former BharatPe co-founder and managing director (MD) Ashneer Grover is yet again in the news as he has targeted the Reserve Bank of India’s recent mandate of disallowing pre-paid payment instruments (also known as PPI) from being in operations with credit lines.
Through his official Twitter account, Ashneer wrote that he latest move by RBI is only meant to protect the “banks’ lazy credit card business from fintech’s potent BNPL (buy-now-pay-later) business.”
Adding more to his tweet, Ashneer Grover wrote: “Not allowing loading of pre-paid instruments through credit is aimed at protecting the banks’ lazy credit card business from fintech’s potent BNPL business. It’s a flex move by banks – rent-seeking. But, market is market and regulations will eventually come around to what market need.”
Also Read: Maharashtra Political Crisis: Six more join rebel camp, Shiv Sena likely to split
In a recent development, through the issuing of a one page circular on Monday, RBI mandated all non-bank PPIs to stop operating on loading credit lines for their products. On Wednesday, the recent mandate by RBI has left the fintech companies at shock as the new move has left these firms with no other option but to temporarily put hold on all the new transactions being made for pre-paid mediums.
From today, several fintech biggies such as EarlySalary, Jupiter and KrsditBee have temporarily blocked customers from using any of their previously offered pre-paid payment options. Currently no consumer is allowed to make any pre-paid transactions through pay later cards.
Amidst the rising concern on no due clarity provided by the Reserve Bank of India, fintech companies as well as the banks assisting in co-branding exercises of credit cards are under immense monetary pressure. By now, many banks have worked on r-strategizing, while others are thinking of withdrawing support from the PPIs provided to fintech companies.
Also Read: Indonesian government to begin construction of new capital city worth $34 million from August’22
According to sources, country’s leading digital fintech companies as well as credit card challenger and lending firms are joining hands to file a petition in the court against the union and central banking authorities to come up with more clarity on the recent mandate. Soon after this development, Ashneer Grover had come up with his tweet.
