Bajaj’s note comes after a circular from the Reserve Bank of India (RBI) last month
sent the fintech industry into a tizzy as its directive to industry stakeholders barred prepaid payment instruments (PPIs) from being loaded with credit lines.
While industry associations are seeking further clarity on the matter from the RBI and government, Bengaluru-based Slice and Uni Cards are being seen as likely to get hit the hardest by RBI’s note in June.
“Today, we are very well capitalised, our credit risk numbers are one of the best globally and our word of mouth customer acquisition is stronger than anyone else in our space,” Rajan said in his note. ETtech has reviewed it.
“Their (RBI) main purpose is always to serve the Indian citizens better. At Slice, our whole basis of existence is providing world class customer experience in India. There’s a huge overlap in our objective with that of RBI’s. We are committed to complying with an ever-expanding set of laws and regulations, as well as upholding the highest standards of governance and ethical business conduct,” Bajaj wrote in his email to Slice employees on Friday morning.
“This environment demands that every team member and leader be committed to regulatory excellence. I am confident that as long as we operate with integrity, customer focus, and transparency, we will
in this phase and, hopefully, the sector will become even healthier. That’s what we need to focus on!.”
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Earlier in May, Slice said it
was shifting its focus to unified payments interface (UPI) and other payment methods on its app as it wanted to diversify from just a card-based credit line business.
ET
reported on June 23 that RBI’s communication on PPIs had the backing of the government and had come after commercial lenders raised concerns over alleged flouting of rules by fintech companies.
These concerns included slackened know your customer (KYC) norms and breaches in anti-money laundering (AML) guidelines by the fintech firms, ET reported citing sources.
Post the order, the fintech industry began consultations with the RBI to clarify the communication, with industry body Payments Council of India (PCI) making a
joint representation to the government on the matter.
In its letter, PCI said wallets that comply fully with know your customer (KYC) norms should be treated on par with bank accounts, and that they should be allowed to disburse credit.
The RBI’s recent move against credit lines has caused disruptions among digital lending and card-based fintech firms, with the industry continuing to reach out to the central bank for consultations.
Fintech firms such as Jupiter, EarlySalary and KreditBee have also temporarily stopped customers from making any transactions on their prepaid cards, ET
reported on June 23 citing sources.
Players such as Slice and Uni, which are touted to be most affected by the move, have slowed down issuances of new credit cards as regulatory uncertainty continues, the above-quoted people said.
More recently, PayU’s lending arm LazyPay also
updated its terms and conditions to comply with the recent market directive. ET first
reported on July 5, that it has also temporarily disabled support for buy-now-pay-later (BNPL) payment product LazyPlus UPI for even its existing user base, amid rising regulatory concerns for card-based credit fintech firms.
Sources told ET then that the company was looking to relaunch its credit card ‘LazyPay Card’ as a credit card, instead of a prepaid offering and reissue them to the customers to comply with the RBI’s directives.
