MobiKwik Xtra Suspends ‘Anytime Withdrawals’ Amid RBI Crackdown

MobiKwik Xtra Faces Backlash Over Withdrawal Policy Changes

MobiKwik’s Xtra platform has recently come under scrutiny after it suspended its ‘anytime withdrawal’ feature, following regulatory changes by the Reserve Bank of India (RBI). The suspension has sparked frustration among users, who report that their investment withdrawals have been restricted and that investments were transferred to other borrowers without their consent.

Impact of RBI Regulations

The RBI’s crackdown on peer-to-peer (P2P) lending platforms has led to significant changes in the industry. The new RBI master directions, effective from August 16, 2024, prohibit P2P lending platforms from offering products with tenure-linked assured minimum returns and immediate liquidity options. This regulatory shift has directly impacted platforms like MobiKwik Xtra, which was previously offering high returns of up to 14% on investments.

MobiKwik’s Response

A MobiKwik spokesperson explained that the changes, including the suspension of ‘anytime withdrawals’, were necessary due to the new RBI regulations. “Due to the amendment of the P2P NBFC master directions, Lendbox has restructured this product, resulting in the suspension of anytime withdrawals among other changes. MobiKwik only acts as a channel partner for Lendbox,” the spokesperson said.

Users will still receive their principal and interest payments as borrowers make repayments, which will be available for withdrawal on the 12th of each month. The updated repayment schedule will be visible on the MobiKwik app in the coming days.

Broader Industry Impact

MobiKwik Xtra is not alone in facing challenges. BharatPe’s 12% Club has also faced user backlash and slowed onboarding processes following similar regulatory changes. Reports indicate that onboarding by P2P lending platforms has dropped by over 90% since the RBI’s new directives. Some platforms, including Liquiloans, have ceased onboarding new users altogether.

Future of P2P Lending in India

The regulatory changes have significantly altered the landscape for P2P lending in India. Major platforms like LenDenClub, Faircent, 13Karat, and CRED Mint are navigating these new rules, which aim to ensure greater transparency and protect investors.

As the industry adapts to these regulations, users and investors are advised to stay informed about changes in platform policies and regulatory compliance.