The Reserve Bank is considering various options to ensure that customers are not put at risk on account of activities of non-bank fintech players with regard to prepaid payment instruments (PPIs), sources said.
Earlier this week, RBI issued an advisory clarifying that non-bank prepaid payment instrument (PPI) issuers cannot load their wallets and cards from credit lines or preset borrowing limits.
Such practice, if followed, should be stopped immediately and any non-compliance will attract penal action, the advisory said.
According to sources, the idea behind the issuance of the advisory was to ensure customer safety and also to stress the fact that any business that requires an authorization or a licence should not be done by someone else without authorization or licence.
The RBI is in discussion with the players and exploring options to deal with the situation, sources said. Innovation should not be based on regulatory arbitrage so various options are being explored including devising a framework and greater disclosure for non-bank fintech players issuing prepaid payment instruments (PPIs) and Buy Now Pay Later (BNPL) players, sources
said.
PPIs are instruments that facilitate purchase of goods and services, financial services, and remittance facilities, against the value stored therein.
