Fintech startup Uni has temporarily suspended its card services after the Reserve Bank of India (RBI) issued guidelines on digital lending, in a move that will impact scores of users, according to media reports.
After the recent RBI notification around digital lending, the company suspended the services for Uni Pay 1/3rd Card and the Uni Pay 1/2 Card.
In a statement, Uni said, "We are working with our banking partners to resume the card services as soon as possible and will keep you posted. However, there will be no change to your billing and repayments."
It added, "This process will begin in phases for our customers starting today and will be concluded by Monday, August 22, 2022."
Uni's card services partner State Bank of Mauritius or SBM India had recently stopped servicing new customers until further clarity from RBI on the guidelines. RBI is tightening its lending rules to enhance security in the financial system.
Some market observers have expressed concern over the issue. Speaking to a media outlet, an entrepreneur requesting anonymity said RBI's lack of clarity on the lending norms impacted startups and customers.
Uni said its customers can still access Uni Cash to transfer their credit to bank accounts. Meanwhile, it has extended the zero-charge partial limit on Uni Cash till September 21.
In a notification, Nitin Gupta, founder and CEO of Uni, said the company would ensure every customer has access to their credit line through Uni Cash, as it is used for urgent payments like fees and medical bills.
Gupta added that customers would not face any problem using their funds due to the free partial limit option.
SBM India has also reportedly relayed its decision to pause onboarding new customers to Slice and PayU's LazyPay, payment services companies, after RBI's digital lending guidelines on August 10.
In a circular on June 20, RBI had prohibited the loading of PPIs (prepaid payent instruments) via "credit lines," and following that, Uni had also stopped entertaining new customers.