Revolut India, supported by Tiger Global and Softbank, has gained RBI permission for prepaid payment instruments, thereby boosting its position in the Indian market. The clearance enables the provision of multi-currency forex cards and cross-border remittance services, hence improving financial alternatives for Indian consumers.
Tiger Global and Softbank-backed Neobank Revolut India have got in-principle approval from the Reserve Bank of India (RBI) to issue Prepaid Payment Instruments (PPI), such as prepaid cards and wallets, according to CEO Paroma Chatterjee’s LinkedIn post on Friday.
A neobank is a digital-first financial institution that provides banking services such as checking accounts and debit cards but has no physical location. The phrase neobank is frequently used interchangeably with fintech bank, challenger bank, and digital bank. Neobanks seek to streamline the banking process by providing financial services in a customer-centric, digital-only environment.
This license expands on Revolut India’s existing RBI licenses, letting it to operate as a Category-II Authorised Money Exchange Dealer (AD II) for issuing multi-currency forex cards and providing cross-border remittance services.
“It is a major milestone for us, as it lends us the unique opportunity to offer Indian consumers both international and domestic payment solutions on a single platform,” Chatterjee said in a statement..
Revolut, Europe’s largest neobank, entered the Indian market in 2021 with the goal of challenging established companies in the domestic payments sector. The RBI’s approval is expected to bolster Revolut’s position as a prominent participant in that market.
PPIs are instruments or payment tools that use stored monetary value, such as digital wallets, smart cards, or vouchers, to conduct transactions.
RBI governor Shaktikanta Das suggested on April 5, 2024, that PPI holders be able to make UPI payments in a manner akin to those of bank account holders by linking PPIs through third-party UPI applications.
“Complete compliance with all regulatory regulations is our top priority. “India is the only market where Revolut has undertaken the massive task of localizing the global tech stack, in order to comply with local regulations,” she stated in the Linkedin article.
In an interview with the Economic Times, BFSI, Chatterjee outlined Revolut’s plans to offer a full array of digital-first money management services to all Indian consumers. These services will help customers manage their funds, including payments and remittances, both locally and abroad.
Employees are presently using the app, which will be publicly launched once internal testing is completed, according to Chatterjee.
She added that there are over 175,000 prospective clients in Revolut India’s queue, indicating a high level of interest in the product.
