LazyPay updates term to comply with RBI order
Abstract: On Thursday, the buy-now-pay-later (BNPL) service asked its customers to accept the terms, failing which all transactions on all LazyPay products would be blocked.
The lending arm of PayU India, LazyPay, has finally updated its terms and conditions to comply with the Reserve Bank of India (RBI). This banded prepaid payment instrument (PPIs) from being loaded with credit lines
The buy-now-pay-later (BNPL) service asked its customers to accept the terms, failing which all transactions on all LazyPay products would be blocked.
“To comply with the latest regulations, we need to block your transactions on all LazyPay products from today. To continue using LazyPay, please accept the updated T&Cs now,” the company said in a communication to customers,
On June 20, the central bank disallowed non-bank wallets and pre-paid cards from loading their credit lines onto these platforms.
“The PPI-MD (master directions) does not permit loading of PPIs from credit lines. Such practice, if followed, should be stopped immediately,” the regulator had said.
Certain card-based fintech firms, as well as digital lending firms, were disrupted by the move and since then industry stakeholders have been reaching out to the RBI for consultations.
These concerns included slackened know your customer (KYC) norms and breaches in anti-money laundering (AML) guidelines by the fintech firms.
Several fintech firms such as Jupiter, EarlySalary, and KreditBee temporarily stopped customers from making any transactions on their prepaid cards as a result of RBI’s directives.
Banks such as RBL are also pulling out of their co-branding card arrangements with fintech firms and seeing the level of uncertainty in the market.
The company revised its terms last week, saying that multiple-installment loan repayments would be charged a 36% interest rate. As part of its recommendations, PCI said KYC PPIs should be treated equally to bank accounts and should be allowed to disburse credit.