RBI Directs TalkCharge To Stop Issuing Wallets; Refund Balances

The Reserve Bank of India (RBI) has once again directed payments platform TalkCharge Technologies to cease operation and issuance of its prepaid payment instruments (PPIs) and refund the remaining amount lying in these wallets to customers.

Earlier this month, the central bank cracked down on the company for offering PPIs on its website and app without obtaining the requisite certificate of authorisation. The platform has been directed to refund the balances in these customer wallets by May 17. 

However, in a clarification issued on Thursday (April 25), the RBI said that the fintech platform had issued a legal notice to its customers and demanded repayment of the cashback amount. 

The legal notice also purportedly warned that those not returning the cashback payments would be reported to the RBI. However, the central bank rebuked the claims and said that it only issued directions for refunding the amount lying in the wallets to customers.

“… the entity has created an impression in the minds of its customers that demand for repayment of cashback amount is being made as per the directions of the RBI. It is clarified that the RBI has only directed the entity (TalkCharge.) to refund the prepaid amount lying in the wallets, to the customers,” added the RBI.

The Apex Bank also warned the general public to exercise “utmost caution” and verify the credentials of such websites and apps before using them.

“Members of (the) public are urged to exercise utmost caution while using websites / application/s, and parting with their money to any such unauthorised entity. Members of (the) public should verify and satisfy themselves that the website/application used or the entity they are dealing with is authorised to carry out the activity it performs,” added the central bank.

The development comes at a time when the RBI has tightened its scrutiny around the Indian financial sector. Earlier this week, it barred Kotak Mahindra Bank from onboarding new customers through its online and mobile banking channels for “serious deficiencies” and non-compliances with regards to its IT systems.

Earlier this year, the RBI also came down heavily on Paytm Payments Bank and restricted the fintech platform from undertaking multiple business activities on account of “persistent non-compliances and continued material supervisory concerns”.

Not just this, the central bank has also tightened its scrutiny of applicants looking to acquire payment aggregator (PA) licences, which are mandatory for acquiring merchants and delivering digital payment acceptance solutions. 

Many big names including the likes of Razorpay and Cashfree have had to see their PA licences put on hold before the RBI again began issuing PA authorisation in the past few months. That said, the central bank continues to keep a hawk’s eye on the homegrown fintech space, which is estimated to be a $2.1 Tn market opportunity by 2030.