BusinessFinance

To comply with the RBI’s mandate, Slice will amend its lending policy

Recent reports claim that Slice informed users by mail that in contrast to the former free-to-use credit line, customers now need to apply for new credit approval each time they use their card.

In other words, Fintech Slice recently informed all of its customers that it would be changing its lending model slightly. This move can only be interpreted as an effort to circumvent the RBI’s directive, which states that credit lines into prepaid payment instruments (PPIs) like wallets and prepaid cards are prohibited.

As previously reported, the business sponsored by Tiger Global is claimed to have required clients to get new clearance for a particular amount each time they use the Slice prepaid card to trade in an email to its customers on June 19.

Also Read: The stocks of Tata Steel, SAIL, and JSW Steel have all fallen. Here are the details

Moving on, it is said that this new strategy is fairly comparable to how lenders that are considered pure play Buy Now Pay Later (BNPL) companies, such as ZestMoney and Axio, lend. In reality, these players have let customers know what they are entitled for. However, distinct loans are approved by numerous lending partners for the customer’s desired purchases.

Axio and ZestMoney do not really lend through any PPIs, therefore even though this specific model is to be governed by the digital lending regulations, it was unaffected by the RBI’s explanation. While Slice reportedly plans to convert the credit line to a loan while maintaining its basic card service.

“Although Slice used to provide credit lines, it rejected payments at some merchant checkout points because it deemed them dangerous. But the RBI’s explanation prompted them to make more adjustments,” a fintech executive added.

Also Read: The importance of life insurance in the financial planning of Generation Z

Additionally, the site calls this a “new feature” called “Purchase Power” and states that “The choice will be based mostly on merchant credibility risk, fraud checks, and your prior payments as well as payback habits.”

A Slice spokesperson was quoted as saying, “We at slice follow strong governance standards, and with this move, we want to deliver the most transparent product possible,” according to a Moneycontrol story. We believe that by explicitly defining every transaction as a borrowing event, we not only protect ourselves from unneeded risk but also stop our borrowers from taking on more debt than they can handle.

Last but not least, it is claimed that both the underwriting and the alleged approval of the loans are performed in real-time, which implies that the amount will also be refused or accepted after real-time underwriting.

Also Read: How To Get Central Bank Of India Personal Loan

This action will undoubtedly make things more difficult for the company’s current clients who have been paying using the aforementioned card. Customers will now need to wait for the corporation to approve the credit limit before using the card.

After reading thus far, I assume you have a good understanding of Slice and its new lending policies. At this point, I feel you can determine for yourself whether you think it was the appropriate decision to implement these new rules and if you will continue to use Slice as a payment method.

What do you think about Slice’s new lending strategy in conclusion? Do read other articles on our website to learn more about these reports. Thank you for your time, and please let your investor friends know if you find our information to be informative.

Also Read: According to Bank of America, the next bull market is just months away, and it may lift the S&P 500 to 6,000 points

Related Articles

Back to top button