RBI's diktat on credit lines to force India's non-banks to rethink business models

FILE PHOTO: A worker walks past the logo of Reserve Bank of India (RBI) inside its office in New Delhi, India July 8, 2019. REUTERS/Anushree Fadnavis/File Photo

India’s central bank has disallowed non-bank prepaid cards and prepaid wallets — or prepaid payment instruments (PPIs) — from loading these platforms through credit lines.

In a circular on Tuesday addressed to issuers of the PPIs, the RBI said: “The PPI- master direction does not permit loading of PPIs through 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”.

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