Uni Cards halts services of two products following RBI's digital lending guidelines

Prepaid payment card player Uni Cards, on Friday, said it has suspended services of its two products following the RBI directive in June, prohibiting offering credit lines to customers.

The company said it has decided to pause onboarding in light of the Reserve Bank of India (RBI)’s latest guidelines, released on June 20, 2022, that prohibited loading prepaid payment instruments (PPIs) via credit lines.

RBI, in its latest guidelines, asked the non-bank PPI issuers to stop providing credit lines on PPI cards and directed them to stop the practice immediately.

Uni Cards, in an official statement, said, “We have decided to proactively suspend card services on our products - the Uni Pay 1/3rd Card and the Uni Pay 1/2 Card. This process will begin in phases for our customers starting today and will be concluded by Monday, 22nd August 2020..., we are always committed to being compliant and want to be on the right side of the regulations.”

"Given so many of our customers rely on their Uni Cards for everyday needs, we are extending a zero-charge partial limit on Uni Cash till 21st September 2022," it further added.

Nitin Gupta, founder & CEO of Uni Cards, said: “Due to the latest RBI guidelines on digital lending, we are proactively suspending our card services in phases by Monday. Bearing the fact in mind that the Uni Cards is used for urgent needs like fee payments, medical bills and emergencies, we have ensured that every one of our customers will have access to their credit line through Uni Cash,"

"All loan disbursals and repayments are required to be executed only between the bank accounts of borrower and the regulated entity without any passthrough/pool account of the lending service providers or any third party," RBI said.

The central bank also addressed concerns over data collection.

(With input from agencies)