Ashneer Grover slams RBI over non-bank PPIs directive

NEW DELHI: Ashneer Grover, who was sacked along with his wife Madhuri Jain Grover by fintech platform BharatPe over alleged financial irregularities, has slammed the Reserve Bank of India (RBI) over its latest directive to non-bank prepaid payment instruments to stop loading credit lines onto their products.

In a tweet, Grover 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”.

“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.

The RBI, in its latest one-page circular, has disallowed non-bank PPIs from loading credit, and several such startups and firms have already stopped customers’ transactions on their prepaid cards to avoid penalty.

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.

“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.

Grover is reportedly in talks with US-based private equity companies to raise up to $300 million for a new startup.