Fintechs seek 1 yr sunset clause on RBI’s PPI issuer credit lines directive

With the RBI cracking down on credit facilities provided by non-bank prepaid payment instrument issuers, industry players are seeking a reprieve through a sunset clause of at least a year, industry sources said on Friday.

Earlier this week, the RBI directed the non-bank prepaid payment instrument (PPI) issuers to stop providing credit lines on such PPI cards and asked them to stop the practice immediately.

“A bunch of fintech players have come out with these PPI cards, and it really boomed during the last two years, especially post-Covid. So, a number of people were brought to the new-to-credit and the Buy Now Pay Later (BNPL) proposition of business, the regulator had red flags, saying it is uncontrolled,” a source said.