Fintechs have sought an extension of six months from the Reserve Bank of India (RBI) over its latest circular that sent credit card challengers and card-based fintechs into a tizzy, reported The Economic Times.
They see the extension request as the ‘most critical’ item on the ongoing issue.
“This is very critical as other RBI guidelines like the one on co-branding cards came in advance giving time to companies to react to it. Monday’s note on nonbank prepaid payments instruments (PPIs) is effective immediately,” one of the people involved in the discussion said, ET reported.
The central bank on Monday barred non-bank wallets and prepaid cards from offering credit lines on fintech platforms .
“The representation seeking extension on compliance timeline also shows the industry is responsible and is trying to do the right thing,” another person aware of the discussions on Thursday evening said.
Representatives of credit card challenger firms Slice and Uni Cards were present in the meeting among others. Their representation would also highlight the role of financial inclusion played by these startups.
While increasingly there is consensus that RBI’s latest rules will have a broader impact on a range of fintech startups, credit card challengers alone have seen investments of more than $500 million over the past 18 months from investors like Tiger Global, Insight Partners, General Catalyst and others.