RBI rejects Instamojo’s payment aggregator license application – Times of India

The Reserve Bank of India (RBI) reportedly returned InstamojoApplication for payment aggregator (PA) license. According to a report in the Economic Times, A fintech company stated that he plans to submit the application again after a year.
Bengaluru-based Instamojo has ceased operations payment gatewayBusinesses to comply with RBI rules this September after receiving final application status. To ensure business continuity for merchants, the company has introduced licensed PAs. Instamojo claims to have a total of 2.5 million merchants registered on its platform, of which nearly 25,000 were active in September before the RBI withdrew the application. Instamojo has signed on two licensed PA partners so far and is expected to add two more in the coming months. However, the company declined to identify the two new PA partners.
News website The Morning Context was the first to report the RBI's withdrawal of Instamojo's PA application.
“Under the rules, entities have a one-year freeze period before they reapply for a (PA) license. Last year, of course, RBI made an exception. We will reapply for the license after a year and the RBI has directed us to do so,” co-founder and chief operating officer Akash Gehani told the publication. “We have alerted our merchants to the disruption and have begun processing payments with new partners.” Those affected now will only be in double digits,” Gehani said.
Why RBI rejected Instamojo's application
The central bank is said to have decided not to grant a PA aggregator license to Instamojo as the company did not meet the net worth criteria. “It was with the eligibility criteria related to the net worth of the company. There was a difference in RBI's calculation and how we arrived at the net worth (of the PG business) in 2021. But our conversation with RBI has been positive and good so far,” he added.
The move is reportedly a major blow to the 11-year-old company, which provides e-commerce tools and payment services, as several of its merchants have been left with payment settlements.
The failure of the PA license is also likely to affect Instamojo's revenue, as nearly three-quarters of it comes from payments.