Non-Banks Fintechs Can't Load PPIs With Credit Lines: RBI

This comes in the backdrop of credit instruments such as BNPL (Buy Now Pay Later) and fintech-backed credit cards

The Reserve Bank of India has issued a clarification on Prepaid Payment Instruments (PPIs) to non-bank fintechs stating that PPIs cannot be loaded with Credit Lines. 

"The PPI-MD does not permit loading of PPIs from credit lines. Such practice, if followed, should be stopped immediately. Any non-compliance in this regard may attract penal action under provisions contained in the Payment and Settlement Systems Act, 2007," the RBI's clarification letter reads.

Currently, platforms like Slice and Uni offer Pay Later cards that claim to be credit card challengers, where users can apply for cards through a 100% digital process in their mobile app.

How it works is that the credit underwriting is done in a partnership with the NBFCs and card issuance with a bank.

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