In a sudden turn of events, mobile wallet and payment platform Mobikwik has withdrawn its 6 per cent annual profit scheme from the market.
Mobikwik had launched the ‘6 percent profit club’ – which offered a six per cent cashback to customers with a monthly balance of atleast Rs. 5,000 in their mobile wallet. This was the first ever scheme in India that was aimed at providing higher profits than institutionalized savings bank account.
And that’s where the problem sets in — how could the RBI overlook such an illicit act under their governing power?
After the launch of the annual profit scheme, Mint got in touch with the RBI to dig deeper and know more details about the scheme and whether RBI had authorized the scheme or not. The RBI responded that the payment solution doesn’t offer any such schemes and added that,
Mobile wallet companies are not permitted to mobilise funds/deposits by offering cash back in nature of interest etc. To our knowledge the entity is no more allowing/offering such product.
Since, Mobikwik hasn’t been granted with a banking licence, so it has no jurisdiction operating as one and offering bank-like services. There is now no news about the 6 per cent promotional scheme available on the company’s website and any or all details about the scheme have thus been removed.
Mobikwik has declined to make any comment on the subject matter. It hasn’t been forthcoming and offered no bite on the withdrawal of their revolutionary vision to empower cashless transactions.
The mobile wallet platform had introduced the 6 percent annual profit scheme as a part of the expansion of its services, including instant micro loans to its customers. The mobile wallet’s vision is to reach out to over 230+ million Indians who have no access to either banks accounts or plastic money.
If RBI had allowed the payment platform to continue to operate and provide the 6 per cent annual cashback, then one one hand it would have been a game changer for Mobikwik, while on the other an unjust behavior for other wallet services(who have been denied a banking licence).
Mobikwik even though has been denied to operate the 6 percent profit scheme, will work to provide small loans of Rs. 500 – 2500 to those who are in urgent need of cash during a transaction. It has also partnered with consumer lending platform – CashCare to take care of the same.
Here’s a statement, The Tech Portal has received from Mobikwik CEO and Founder Bipin Preet Singh, (emphasis my own)
We launched the profit cashback offer as part of an overall package of incentives, to reward our existing users and encourage more users to load & therefore transact on MobiKwik.
There were certain concerns on the language of the campaign that were flagged to us and we are working with the regulators in resolving these concerns so we can continue with the offer.