Indian Payments Council Contacts Government Over Central Bank Lines of Credit Directive


  • The Payments Council of India (PCI) wrote to the government, seeking its intervention against a directive from the central bank.
  • The central bank had prohibited payment companies from charging lines of credit on wallets and prepaid payment instruments.
  • The PCI urged the government to treat wallets on an equal footing with bank accounts.

The Payment Council of India (PCI), a trade body comprised of various payment and settlement stakeholders in the country, has written to the government, urging it to step in and address the issues created due to a recent Reserve directive. Bank of India (RBI).

The central bank had recently banned payment companies from loading credit lines on wallets and prepaid payment instruments (PPIs). This effectively prevents companies like Sliceunicards, Amazon paymentLazyPay and others to offer lines.

RBI had issued the circular after commercial banks approached it about a likely violation of rules, including KYC guidelines and anti-money laundering regulations by fintech companies and challenger credit card brands. .

According to a report by Economic Times, the PCI has asked the government to treat wallets that comply with complete know-your-customer (KYC) standards on an equal footing with bank accounts, allowing them to offer lines of credit .

“A customer drawdown on a non-revolving line of credit (which was granted by a regulated lender) should be disbursable in full KYC PPIsaid the PCI in its letter to the government.

In addition to asking the government to treat wallets that comply with full KYC guidelines on an equal footing with bank accounts, the PCI also asked the government to allow non-revolving lines of credit in full KYC PPIs.

What is non-revolving credit?

Non-revolving credit is a situation where an amount or facility of credit is granted on a one-time, non-revolving basis. Unlike credit cards, these facilities do not have the feature of a minimum amount due and come with a clear payment schedule.

There are more than 10 million active lines of credit

The PCI, in its letter, claimed that there are currently more than 10 million active lines of credit whose amount has been paid into a PPI wallet and a card has been issued. He further added that these companies had processed over INR 3,500 crore in transactions as of May 2022.

The PCI used these figures to say that PPIs have led to greater financial inclusion, helping the country move towards a cashless future.

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