New Delhi: Former BharatPe CEO Ashneer Grover, on Thursday (June 23), criticised the Reserve Bank of India (RBI) over its most recent order to non-bank prepaid payment instruments to stop loading credit lines onto their products. Taking it to Twitter, the entrepreneur said that “not allowing loading of pre-paid instruments through credit is aimed at protecting bank`s lazy credit card business from Fintech`s potent BNPL (buy now pay later) business”.
According to him, the decision is a flex move by banks. “It’s a flex move by banks — rent seeking. But market is market and regulation will eventually come around to what market needs,” he added in his tweet. (ALSO READ: Massive layoffs at Netflix again! Streaming company fires 300 employees in second round)
Not allowing loading of pre paid instruments through credit is aimed at protecting bank’s lazy credit card business from Fintech’s potent BNPL business. It’s a flex move by banks – rent seeking. But market is market and regulation will eventually come around to what market needs.
— Ashneer Grover (@Ashneer_Grover) June 23, 2022
In its latest order, the central bank has disallowed non-bank PPIs from loading credit. Following the directive, several startups and firms in the space have already stopped customers’ transactions on their prepaid cards to avoid penalties. (ALSO READ: Work from home could soon become a legal right in Netherlands)
The banking PPIs include HDFC Flexipay, ICICI PayLater, HDFC Payzapp, SBI YONO and others, along with several UPI-driven platforms like Paytm, PhonePe, Google Pay and Amazon Pay, etc, according to a report by IANS.
“The PPI-MD (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,” according to the RBI directive.
Meanwhile, Grover is all set to make an entrepreneurial comeback after he quit BharatPe following alleged financial irregularities cases against him and his wife Madhuri Jain Grover.
According to media reports, Grover is in talks with US-based private equity companies to raise up to $300 million for a new startup.
“Today I turn 40. Some will say I`ve lived a full life and experienced more things than most. Created value for generations. For me it`s still unfinished business. Time to disrupt another sector. It`s time for the Third Unicorn,” he had said in a Tweet last week.
— With IANS inputs.