Mumbai: reserve Bank of India It said on Monday that issuers of prepaid instruments (wallets) cannot allow them to be loaded using a credit line.
the difference between a credit and a credit line Whether the credit is credited to the borrower’s account whose interest meter starts ticking from the moment the money arrives. In a line of credit, the bank provides money to the customer, but it turns into a loan only when the borrower draws the money.
This comes in the wake of some wallet providers including an option that allows the user with no balance to pay later by providing a line of credit. All in one circular non-bank prepaid payment instrument (PPI) issuer, RBI said that its guidelines allow PPIs to be cash, bank account debits, credits and debit cards and other payment instrument Rs.
Bankers said the RBI is adopting a light touch regulation on small-ticket credit, including ‘buy now, pay later’. However, it is insisting that providers make it clear to the borrower who the lender is and the cost of the loan. Earlier this year, the central bank had sought information on banks’ first-loss default guarantee (FLDG) exposure. FLDG refers to a credit guarantee provided by a non-regulated entity to a regulated lender.
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