Impact of Regulatory Changes on Lending
The Reserve Bank of India has issued multiple circulars recently which will have has a direct impact on the Fintech and the BFSI Segment.
RBI has recently released a circular which removes loading of Prepaid Instruments (PPIs) by Credit Lines (which is a subsegment of BNPL).
RBI has clearly communicated in its message PPI Issuers as well as Banks that:
– Prepaid can only be loaded by Cash / PPIs / debit cards / credit cards
– Prepaid loading by Credit Lines is not permitted on immediate basis and non compliance would be attract penal action
What does it mean to the fintech ecosystem?
Impact on Fintech Leaders in this segment (which is a subsegment of BNPL, also called Credit Card Challengers)
– This is a large segment in the ecosystem with many Unicorns and Soonicorns leading the space and they will have to stop the current business model on an immediate basis.
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