Industry bodies including the Internet and Mobile Association of India (IAMAI) and the Payments Council of India (PCI) are preparing to make representations to the Reserve Bank of India (RBI) and various government arms, questioning their stance on supporting innovation and financial inclusion.
This comes two days after the RBI issued a clarification to fintechs, saying that loading credit lines into prepaid payment instruments (PPIs) such as wallets and prepaid cards is not permitted. The move has threatened to junk the business models of a number of fintechs that have seen tremendous growth over the past year such as Slice, Uni, PayU’s LazyPay, KreditBee, EarlySalary etc.
According to multiple sources, the letters will be addressed to RBI Governor Shaktikanta Das, the Finance Ministry, and the Prime Minister’s Office with a core objective of seeking clarification on the two-paragraph long notice that was shared with fintechs.
“The notice has caused a lot of confusion not just for fintechs but also for customers and investors. These fintechs will seek clarity on what RBI exactly wants so they can plan their business models accordingly,” said one of the sources on the condition of anonymity.