RBI orders BNPL player Simpl to suspend payment operations

The Reserve Bank of India (RBI) has directed Bengaluru-based buy-now-pay-later (BNPL) startup Simpl to immediately cease all payment operations, for not having the requisite authorisation under the Payments and Settlement Systems (PSS) Act.

The development was first reported by The Economic Times.

The order, conveyed by the regulator to the startup in a letter dated September 25, 2025, directed Simpl to immediately stop the business of payment systems carried out by involving functions of payment, clearing and settlement.

The central bank contends that Simpl has been functioning as a payment system operator without securing the necessary Certificate of Authorisation under the Payment and Settlement Systems (PSS) Act, 2007.

Such an operation (i.e., one engaging in payment, clearing, settlement) without proper authorisation, the RBI said in its letter, violates the provisions of the PSS Act.

RBI’s action comes after the Enforcement Directorate (ED) initiated proceedings against Simpl and its founder-director, Nithyanand Sharma, under the Foreign Exchange Management Act (FEMA), 1999 earlier in July this year.

The agency alleged that the company was involved in foreign exchange irregularities amounting to nearly ₹914 crore.

Investigators claim that Simpl, which is officially registered as One Sigma Technologies Pvt, had raised overseas capital on the premise of providing technology services. However, instead of sticking to that mandate, the funds were allegedly funneled into financial services activities.

Since these activities required prior regulatory clearance, the ED maintains that the move breached India’s foreign direct investment (FDI) regulations.

Simpl is a fintech startup that offers BNPL services to customers across e-commerce, food delivery, and quick commerce platforms. It allows users to checkout instantly and pay later, typically within a 15-day period with zero interest. Its merchant clients include names like Zomato, BigBasket, Rapido, Box8, and others.

The company claims it works with over 26,000 merchants.

Simpl was co-founded by Nitya Sharma (a former Goldman Sachs vice president) and Chaitra Chidanand (who later exited in 2020 to co-found another fintech).

Over time, it has raised around $83 million in funding, attracting investors like DIA Investments, Hard Yaka, FJ Labs, Valar Ventures, and others.

Unlike many BNPL players that tie up with regulated financial institutions or hold NBFC licenses, Simpl is known to have avoided acquiring an NBFC license and instead positioned itself more like a payments utility. In prior statements, its founders described the model as akin to a “khata” (a traditional ledger) system.

The PSS Act, 2007 governs payment systems in India, giving the RBI the power to regulate and supervise such systems. Under Section 4 of the Act, no entity may commence or operate a payment system unless authorised by the RBI.

The Act also empowers the RBI to revoke authorizations or issue directions if a system provider contravenes provisions of the Act. Entities operating payment systems are required to comply with reporting, governance, and risk protocols laid down in regulations under the Act.

The RBI’s core contention is that Simpl was effectively acting as a payment system — performing payment, clearing, settlement — without obtaining the requisite authorization, which is a violation of the PSS Act.

CNBC-TV18 reached out to Simpl’s founder Nitya Sharma, but was yet to receive a response from him at the time of publishing this article. The article will be updated if a response is received.

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