Neobanking Startup Muvin Shuts Ops Due To RBI Barring UPI In Co-Branding Arrangement

Youth-focused neobanking startup Muvin has reportedly shut its operations.

As per an Entrackr report, the startup’s decision to shut down was a fallout of the Reserve Bank of India’s (RBI’s) order last year forbidding UPI in a co-branding arrangement.

A notification on the Muvin app said, “muvin card program has been closed. Any available balance is being migrated to issuer Livquik app. The migration is expected to be finished by 1st Feb and we would notify next steps to access your balance. Thank you for the support and we regret that muvin is unable to support your journey towards financial literacy.”

Muvin was not immediately available to respond to Inc42’s query on the matter.

Cofounded by Vineet Gupta and Mukund Rao, neobanking platform Muvin acquired customers, performed KYC, and offered prepaid cards to students, enabling payments via its prepaid payment instrument (PPI) issuer. The startup had partnered with Livquick, a registered non-bank PPI issuer, to offer cobranded prepaid cards to its customers. 

The startup raised $3 Mn in its pre-Series A round led by WaterBridge Ventures in 2022. Prior to that, it raised $1 Mn in its seed funding round.

Earlier, Inc42 reported that the RBI’s decision to stop UPI in co-branding arrangement would affect 15-20 fintech players.

Over the last couple of years, the central bank has taken a number of steps, including issuing digital lending guidelines, penalising players for flouting PPI norms, and barring loading of non-bank PPIs with credit lines, to better regulate the burgeoning fintech sector.

However, many of these steps have resulted in disruption of the business operations of fintech startups. The RBI’s notification on non-bank PPIs and credit lines impacted a number of big players such as Slice, Jupiter, Unicards, and OneCard. 

Last month, Inc42 also reported how the cancellation of the payment aggregator licence by the central bank disrupted the operations at Instamojo and many other fintechs.

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