The Reserve Financial institution of India (RBI) has directed Bengaluru-based buy-now-pay-later (BNPL) startup Simpl to instantly cease all payment-related operations, citing lack of authorisation below the Fee and Settlement Techniques (PSS) Act, 2007.
Based on a letter dated September 25, 2025, the central financial institution stated Simpl was working as a fee system operator with out the necessary Certificates of Authorisation. The order requires the corporate to stop actions involving fee, clearing, and settlement capabilities with fast impact.
The RBI pressured that such operations with out approval violate provisions of the PSS Act. The legislation empowers the central financial institution to control and supervise fee methods in India, with Part 4 explicitly prohibiting any entity from working such methods with out prior authorisation.
The event was initially reported by The Financial Occasions.
The regulatory motion towards Simpl comes simply months after the Enforcement Directorate (ED) launched a probe into the corporate. In July, the company filed a case below the Overseas Change Administration Act (FEMA), 1999, towards Simpl and its founder-director, Nitya Sharma, over alleged foreign exchange violations value ₹913.75 crore.
Based on the ED, Simpl, included as One Sigma Applied sciences Pvt Ltd, acquired overseas funding earmarked for expertise companies. Nonetheless, investigators allege the startup diverted these funds into monetary companies with out acquiring the required clearances, thereby breaching India’s overseas direct funding (FDI) rules.
Based in 2015 by Sharma, a former Goldman Sachs vice chairman, and entrepreneur Chaitra Chidanand, Simpl positioned itself as a frictionless funds utility quite than a regulated lender. The corporate’s mannequin allowed clients to make purchases immediately and settle funds later—often inside 15 days at zero curiosity. Its service provider community spans greater than 26,000 companions, together with Zomato, BigBasket, Rapido, and Box8.
Over time, Simpl attracted important enterprise capital backing, elevating about $83 million from world traders similar to DIA Investments, Onerous Yaka, FJ Labs, and Valar Ventures. Regardless of fast progress, the corporate averted pursuing a non-banking monetary firm (NBFC) license, in contrast to many BNPL rivals that tie up with regulated establishments to function compliantly. Its founders often likened Simpl’s method to a contemporary model of a standard khata (ledger) system.
Nonetheless, regulators seem unconvinced by this positioning. The RBI’s order means that Simpl’s operations—facilitating fee, clearing, and settlement between shoppers and retailers—squarely fall throughout the scope of actions requiring central financial institution authorisation.
Underneath the PSS Act, the RBI can difficulty instructions, impose restrictions, or revoke permissions if a system supplier is discovered to be non-compliant. The central financial institution’s directive alerts heightened scrutiny of fintechs working in regulatory gray zones.
For Simpl, the dual challenges of the RBI’s suspension order and the ED’s ongoing probe threaten to upend its enterprise mannequin, elevating questions on the way forward for unlicensed BNPL gamers in India’s fast-evolving digital funds ecosystem.
