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RBI reviews e-wallets after sudden collapse of EV taxi service BluSmart
Reserve Bank of India has begun informal consultations with EV charging-point operators and other app-based EV platforms to assess potential consumer risks
Bloomberg
India's central bank is scrutinizing some digital wallets associated with electric-vehicle players after the sudden collapse of the country's largest all-EV taxi service left users unable to access money tied to their accounts, people familiar with the matter said.
The review of payment tools used in India's fledgling EV ecosystem is a result of troubles faced by users of app-based ride-hailing service BluSmart's digital wallet. The events triggered by fraud allegations against the company highlighted the lack of safeguards for users who load money into what's known as closed-loop wallets to transact on apps, including EV-related services like booking rides or using a charging station.
The Reserve Bank of India has begun informal consultations with EV charging-point operators and other app-based EV platforms to assess potential consumer risks, said the people, who asked not to be identified as the matter is private.
The so-called closed-loop wallets, which are app-based payment systems that can only be used within a single platform, have proliferated in India's fast-growing digital services ecosystem. Unlike open-system wallets regulated by the RBI, these are not directly monitored by the central bank, making them more vulnerable in the event of a platform failure.
After thousands of users who had preloaded cash into BluSmart's wallet to book airport and intra-city rides found themselves unable to get a refund or transfer the funds elsewhere, the operator in April told customers that it will take up to 90 days to return the money.
The RBI did not immediately respond to an emailed request for comments.
The central bank is also said to be mulling a meeting with the parties involved in the coming weeks, people familiar with the plans said.
The bank could propose mandating escrow arrangements for consumer balances, similar to those required of payment aggregators, to ensure funds remain protected if a company shuts down. Another idea is to extend some elements of RBI's Prepaid Payment Instruments (PPI) guidelines to large-scale closed wallets, the people said.
The regulator has not taken a formal stance yet, but any move to bring app-specific wallets under tighter oversight could have broad implications for India's digital economy, where platforms rely heavily on prepaid balances to build stickiness and drive repeat usage.
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