The Reserve Bank of India (RBI) recently ordered the State Bank of Mauritius (SBM) India to halt all transactions using the Liberalised Remittance Scheme (LRS). As a result, fintech startup Niyo has been negatively impacted unexpectedly.
The Reserve Bank of India (RBI) issued a directive on January 23rd, instructing the State Bank of Mauritius (SBM) India to cease all transactions involving the Liberalised Remittance Scheme (LRS) until further notice. This action was taken due to concerns about regulatory compliance. This move has had a direct impact on neobank Niyo, which provides the “Niyo Global Card” in collaboration with SBM Bank.
“Many foreign travelers use Niyo for foreign exchange. I am very worried about the potential impact on the tens of thousands of Indians who are abroad without access to their funds. This decision clearly goes against the principle of protecting customer interests, and I hope it will be resolved quickly,” tweeted a user.
As many questions were raised online and on Niyo’s community page regarding the status of its travel debit card, the company provided clarifications in response.
The neobank, Niyo, acknowledged that international transactions on its debit card product have been temporarily suspended and it is working with its partner bank to resolve the issue. As an alternative measure, the company has also introduced “Zero forexes secured credit cards” to address customer concerns in the meantime.
Niyo announced that it has made “Zero forexes secured credit cards” available as a temporary solution for customers. The company stated that customers can apply for a credit card immediately and start using the virtual card on the Niyo app for all international e-commerce transactions. Additionally, customers can also order a physical “Secure Credit Card” which will be delivered to their registered address within 7-10 days at no cost. The physical card will work at all international ATMs, POS terminals, and e-commerce platforms.
Vested, a company, announced that due to an order from the Reserve Bank of India to the State Bank of Mauritius (SBM India) to stop all transactions under the Liberalised Remittance Scheme, they will be pausing the processing of new deposits through their product, Vested Direct, which is powered by SBM India.
There is uncertainty about what options are available for people who are currently traveling abroad or planning to leave the country, as a result of the Reserve Bank of India’s order for the State Bank of Mauritius (SBM) to halt all transactions under the Liberalized Remittance Scheme. Some users are concerned about the impact on SBM Bank and the sudden nature of the RBI’s order, while others are worried about being stranded abroad without access to cash. The situation remains unclear for those affected.
