The Reserve Bank of India's (RBI) notification that non-bank prepaid payment instruments (PPIs) cannot be loaded with credit lines has thrown the country's fintech ecosystem into disarray, with many of them temporarily ceasing operations. Ashneer Grover, cofounder of BharatPe, criticised the central bank amid mixed reactions and calls for more clarity from stakeholders.
Grover stated in a tweet that the latest RBI notification is aimed at protecting banks' credit card business. "By not allowing credit loading on prepaid instruments, banks can protect their lax credit card business from fintech's potent BNPL business." Rent seeking is a flex move by banks," he wrote. He also stated that regulations will eventually have to be adjusted to meet market demands. "However, the market is the market, and regulation will eventually catch up to what the market requires."