20 Aug , 2022 By : Monika Singh
Challenger card issuer Uni on Friday announced the temporary suspension of two of its cards – the Uni Pay 1/3rd Card and the Uni Pay 1/2 Card.
The suspension comes amid reports that State Bank of Mauritius (SBM) has told its fintech card partners to stop on-boarding new customers in the wake of the Reserve Bank of India’s (RBI) norms for digital lending. Uni, which was one of SBM’s card partners, said the process will begin in phases for its customers starting Friday, and will be concluded by August 22.
Nitin Gupta, founder & CEO, Uni Cards, attributed the decision to suspend the company’s card services to the RBI’s guidelines on digital lending. Since Uni’s cards are used for urgent needs like fee payments, medical bills and emergencies, the company has ensured that its customers will have access to their credit line through Uni Cash, he said.
Uni Cash is a product built to transfer a customer’s credit line directly to their bank account instantly. The company has decided to extend a zero-charge partial limit on Uni Cash till September 21, 2022.
“With a free partial limit enabled, our customers will not face any disruptions while using their funds. We are building something really exciting. Like always, it’s first-of-a-kind and never been done before,” Gupta added.
Uni said that it had earlier paused on-boarding of new customers soon after the RBI wrote to prepaid payment instrument (PPI) issuers on June 20 that such instruments were not to be loaded using credit lines.
In the digital lending guidelines released on August 10, the regulator mandated that all digital loans must be disbursed and repaid through bank accounts of regulated entities only, without pass-through of loan service providers (LSPs) or other third parties.
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