Mufin Finance, one of the leading NBFCs, has received in-principal RBI approval for issuance of semi-closed prepaid payment instruments.
A semi-closed PPI licence allows digital banks, fintech firms and large consumer-facing applications to roll out features such as digital payment solutions for lending.
Mufin Finance is the fourth NBFC to receive such a licence from the RBI, after leading brands such as Bajaj Finserve, Manapurram and Paul Merchants.
The company is in the process of setting up building blocks for launching MufinPay, a digital payment solution which will complement its lending business.
Established in 2016, Mufin Finance intends to use the MufinPay platform to further serve its over 50,000 consumers and onboard more users.
Rajat Goyal, co-founder, Mufin Finance said with this licence, the company can now offer a wider range of complementing products for customers and build deeper partnerships with consumer companies and corporates.
PPI can come in the form of digital wallets, smart cards, magnetic chips and vouchers. PPI acts as a store of value against which goods and services can be bought and used to transfer funds.
Gift cards, payment wallets, smart cards and vouchers are all forms of PPIs. Debit cards, however, need an open PPI licence and are issued only to banks.
Enhanced usage of PPI was allowed by RBIlast August, including cash withdrawal of full KYC PPI. RBI recently imposed certain restrictions on lending through non-bank PPIs.
Founded by Kapil Garg and Rajat Goyal, Mufin Finance operates across India with its phygital approach and is a comprehensive financial services provider offering electric vehicle finance, personal loans, SME loans, working capital and other financial services.
As of last fiscal, the company, with 150 large partnerships, has disbursed loans worth Rs 1,500 crore.