Reserve Bank of India cracks down on fintech firms
Fintechs generally collaborate with banks to issue cards before partnering with non-banking financial institutions or operating their own NBFC business to provide credit lines to consumers. The Reserve Bank of India has prohibited fintech companies from loading credit lines into non-bank prepaid payment instruments (PPIs). Lending has always been the end goal for practically all fintech firms. This week's warning from India's central bank threw a kink in the system, calling into question who can lend to whom. The Reserve Bank of India has informed dozens of fintech startups that it is prohibiting the use of credit lines to load non-bank prepaid payment instruments (PPIs) — such as prepaid cards — in a move that has caused panic among — and an existential threat to — many fintech startups, prompting some to compare the decision to China's crackdown on financial services firms last year. PPI licenses have long been utilized by several firms, including Slice, Jupite...