Fintech startup Uni on Friday said it has suspended card services on its products in line with the recent notification by the Reserve Bank of India (RBI) around digital lending.
The startup said that is proactively suspending services Uni Pay 1/3rd Card and the Uni Pay 1/2 Card, which will impact millions of users.
"This process will begin in phases for our customers starting today and will be concluded by Monday, August 22. While it is a decision taken with a heavy heart, we are always committed to being compliant and want to be on the right side of the regulations," the startup said in a statement.
What will work?
Investors like General Catalyst, Elevation Capital and Lightspeed Venture Partners are backing Uni Cards.
"Bearing the fact in mind that the Uni Card is used for urgent needs like fee payments, medical bills and emergencies, we have ensured that every one of our customers will have access to their credit line through Uni Cash," said Nitin Gupta, Founder and CEO, Uni Cards.
With a free partial limit enabled, "our customers will not face any disruptions while using their funds," he added.
The recent guidelines on digital lending are aimed at creating a robust framework that safeguards interest of customers.
Te framework is based on the principle that lending business can be carried out only by entities that are either regulated by the central bank or entities permitted to do so under any other law.
(With inputs from IANS)