RBI orders BNPL player Simpl to stop payment operations
25 Sep 2025, 08:29 PMSimpl has been asked to immediately stop its payment system operations, citing violations of national payment laws.
Arti Singh
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The Reserve Bank of India has ordered One Sigma Technologies Pvt Ltd, which operates the fintech platform Simpl, to immediately stop its payment system operations, citing violations of national payment laws.
In a letter dated September 25, 2025, reviewed by The Head and Tale, the central bank said,
“It was found through investigations that Simpl is operating a payment system
involving payment, clearing and settlement functions without a Certificate of
Authorisation issued by the Reserve Bank in terms of Section 7 of the PSS Act,
2007.”
This action constitutes a violation of the Payment and
Settlement Systems (PSS) Act of 2007, the RBI note said.
The letter specifies that under Section 4 of the Act, no
entity shall commence or operate a payment system without RBI authorisation.
The central bank determined Simpl's activities were in breach of this key
regulation.
In its order, the RBI has instructed Simpl to
"immediately stop the business of payment system".
The company was also directed to settle any outstanding
financial liabilities with its customers and partners, with the letter stating
the entity was "advised to settle the liabilities with both users and
merchants, if any, to the duly verified bank accounts of such users, merchants.”
By sending the notice to all payment aggregators, the RBI
has also put the broader financial ecosystem on notice. The letter advises
firms to "undertake necessary actions to comply with the directions of the
Reserve Bank," effectively instructing the industry to cease processing
transactions related to Simpl's unauthorised system.
This move by the RBI represents a significant regulatory action within India's rapidly growing fintech sector.
In July, the company was under the scrutiny of the Enforcement Directorate (ED), which filed a complaint under the Foreign Exchange Management Act (FEMA) against Simpl, and its director Nithya Nand Sharma for contraventions to the tune of Rs 913.76 crore.
The ED, in its release, had said that the complaint was triggered on the basis of a "credible information that Simpl has received a substantial amount of foreign direct investment (FDI) from the United States, allegedly in violation of the extant FDI Policy."
During the course of investigation under FEMA, business model and revenue generation model of Simpl were examined and the same revealed that the company is into the business activities which fall under financial activities. However, as per the rules, FDI in financial activities not regulated by any authority is to be brought under 100% approval route, and not the automatic route.
"One Sigma Technologies Pvt Ltd has issued convertible notes without obtaining any approval from the Government of India," the ED stated. With this, Simpl allegedly violated FEMA provisions. The contravention collectively is to the tune of Rs 913.76 crore.
Founded by Nithya Sharma, Simpl is a popular "buy now, pay later" (BNPL) player.
The author is Founder and Editor of The Head and Tale. She can be reached at
[email protected]
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