BharatPe | Ashneer Grover: BharatPe cofounder Ashneer Grover lashes at RBI’s recent mandate

Taking to Twitter, Grover wrote that RBI’s recent move aims to protect the “banks’ lazy credit card business from fintech’s potent BNPL (buy-now-pay-later) business”.

“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 needs,” Grover tweeted.

In a one-page circular issued on Monday, RBI had directed all non-bank PPIs to stop loading credit lines onto their products.

On June 22,
ET reported that the RBI’s move had left fintechs in a daze, with lending firms left with no option amid the uncertainty but to temporarily halt new transactions for their pre-paid instruments.

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Fintech firms such as Jupiter, EarlySalary and KreditBee have temporarily stopped customers from making any transactions on their pre-paid cards,
ET had reported on June 23.

As fintech companies demand more clarity from the regulator, the partner banks of these firms involved in the co-branding exercise of credit cards are also under pressure. While some of them are now reconsidering their strategy, others are thinking of withdrawing the support of their PPIs to these fintechs; sources had told ET.

ET had also reported that the country’s top digital finance companies, including credit card challenger brands and lending firms, are joining together to petition the Union government and the central bank for clarity on the recent directive.

The petition – which is being finalized – was debated at a series of meetings on Tuesday between the Payments Council of India and other industry bodies such as the Federation of Indian Chambers of Commerce and Industry (FICCI), Digital Lenders’ Association of India (DLAI) and the Fintech Association for Consumer Empowerment (FACE).