Non-banks not allowed to load credit lines on prepaid wallets, cards: RBI

This circular by the RBI is likely to impact those fintech players who offer credit lines to customers via their wallets in association with non-banking finance players.

In a move that could impact a number of fintech players, the Reserve Bank of India (RBI) has asked non-bank prepaid payment instruments (PPIs) issuers to not load their PPI instruments through credit lines.

In a circular addressed to the non-bank PPI issuers, the RBI said, “The PPI- master direction 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”.

PPIs are instruments that facilitate purchase of goods and services, conduct of