The Reserve Bank of India (RBI) has cancelled the Certificate of Authorization (CoA) of Muthoot Vehicle & Asset Finance Limited and Eko India Financial Services Private Limited, effective since 31st December, 2021. The RBI press release cited the reason of cancellation as non-compliance with regulatory requirements under the Payment and Settlement Systems Act, 2007. However, the RBI has stated that customers and merchants who have a valid claim against these PSOs can approach them for settlement within 3 years of cancellation.
“Following the cancellation of the Certificate of Authorisation (CoA), these companies cannot transact the business of issuance and operation of prepaid payment instruments,” RBI mentioned in its press release. Prepaid Payment Instruments (PPI) are instruments that have an amount stored on/within them which can be used for activities like fund transfer, purchasing goods or services, etc. Common examples of PPI are mobile wallets, magnetic strip cards and smart cards.
Following the cancellation of their CoA, these two companies cannot continue the business of issuance and operation of Prepaid Payment Instruments.