Home / Industry / Banking /  SBM to stop enrolling clients for credit on PPI
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NEW DELHI : State Bank of Mauritius India told its fintech partners, including Slice and Uni, on 17 August that it plans to stop onboarding new customers for credit on PPI (prepaid instrument), three people aware of the matter said.

This means that the fintech partners who used SBM Bank India’s PPI BIN (bank identification number) to issue prepaid cards to customers and further loaded those cards with credit lines will not be able to onboard new customers.

The bank said it is looking for further clarity from the Reserve Bank of India on this model, the people cited above said, requesting anonymity.

While confirming that Uni has received the communication from SBM, Uni founder Nitin Gupta said, “Uni stopped onboarding new customers on 20 June itself."

On 20 June, RBI issued a letter addressed to all non-bank PPIs (prepaid instrument or wallet) licence holders stating that PPIs cannot be loaded with credit lines. SBM Bank India and Slice are yet to respond to Mint queries.

While the bank hasn’t clarified what happens to existing customers, according to one of the persons aware of the matter, the bank will continue to service existing customers. “The transactions are still going through for existing customers," he said.

RBI’s 20th June circular brought the credit line-linked prepaid cards that allowed BNPL (buy now, pay later), including Slice, Uni, LazyPay, PostPe, MobiKwik, Ola Postpaid, EarlySalary, and some neobanks. SBM Bank was one of the preferred PPI issuers to fintech firms. Most firms were working with SBM via an API infrastructure firm M2P, which helped most of these prepaid card fintechs connect to the bank’s PPIs.

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