RBI Directs BNPL Provider Simpl to Halt Payment Operations

As per The Economic Times reports, the Reserve Bank of India (RBI) has ordered Bengaluru-based fintech firm Simpl to suspend its payment operations with immediate effect. The central bank’s directive, dated September 25, is the latest example of tighter scrutiny in the payments sector, targeting platforms that operate without authorisation.

RBI’s Directive and Violation

As per the news reports, according to the RBI’s letter, “The entity is directed to immediately stop the business of payment systems carried out by involving functions of payment, clearing, and settlement.” Regulators noted that Simpl was running a payment system without a Certificate of Authorisation. 

“It was found through investigations that Simpl (the entity) is operating a payment system involving payment, clearing, and settlement functions without a Certificate of Authorisation. This constitutes a violation of the provisions of the PSS Act, 2007,” the central bank added.

Simpl’s Business Model and Partners

Simpl is best known for its buy-now-pay-later (BNPL) model, which lets users complete transactions instantly and repay within 15 days at no interest. The platform works with more than 26,000 merchants and powers checkouts for popular brands such as Zomato, BigBasket, Rapido, and Box8. 

Founded by former Goldman Sachs vice president Nitya Sharma and entrepreneur Chaitra Chidanand, the company positioned itself as a digital version of the “khata” (dues ledger) used by small retailers in India. Chidanand left the company in 2020 to establish a new venture, Salt.

Funding and Industry Context

Over the years, Simpl has raised close to $83 million from global investors, including DIA Investments, Hard Yaka, FJ Labs, and Honeycomb Investments. In October 2021, the firm secured $40 million in a round led by Valar Ventures and IA Ventures. 

Despite this backing, Simpl never pursued a non-banking financial company (NBFC) licence, unlike most of its peers, who either obtained one or partnered with regulated lenders. 

Read More: RBI Unveils New Digital Payment Authentication Rules: 2FA Mandatory, More Options Beyond SMS OTP from April 2026!

Conclusion

The RBI’s decision marks a critical turning point for Simpl, one of India’s most prominent BNPL startups. With its operations on hold and regulatory expectations rising, the company now faces the challenge of aligning its model with stricter compliance norms. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.