RBI restricts line of credit for prepaid wallet topup

Mumbai: The RBI On Monday, the issuers of prepaid instruments (wallets) could not allow them to be loaded using the credit line.
The difference between a credit and a Line of credit Whether the credit is credited to the account of the borrower whose interest meter starts ticking as soon as the fund is raised. In the line of credit, the bank makes the funds available to the customer, but only when the borrower withdraws the money does it turn into a loan.
This follows specific wallet providers which include an option that allows the unbalanced user to pay later by giving a line of credit. All in one circular Non-bank prepaid payment tool (PPI) issuer, RBI said that its guidelines for PPIs include cash, bank account debit, credit and Debit cards And other payment instruments Rs.
Bankers said the RBI was adopting a relaxed touch regulation on small-ticket credit, with ‘buy now, pay later’. However, it recommends that providers clarify to the borrower who the lender is and the value of the credit. Earlier this year, the central bank sought information on banks’ First-Loss Default Guarantee (FLDG) exposure. FLDG refers to a credit guarantee given to a lender by a non-regulated entity.

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