New Delhi, February 5, 2024 – Muvin, a prominent neobanking startup, has reportedly ceased its operations in compliance with a directive from the Reserve Bank of India (RBI). The RBI’s directive instructed the discontinuation of Unified Payments Interface (UPI) usage in a co-branding arrangement, leading to the closure of Muvin’s UPI-related services.
Muvin’s Notification to Users
Muvin communicated the cessation of its Muvin card programme to users through a notification. The message stated, “Any available balance is being migrated to the ‘Issuer Livquik’ app. The migration is expected to be finished by February 1, and we will notify next steps to access your balance. Thank you for the support, and we regret that Muvin is unable to support your journey towards financial literacy.”
RBI Regulatory Directives and Industry Impact
In June 2023, the RBI directed prepaid payment instrument (PPI) issuers, including Muvin, to discontinue UPI services in co-branding arrangements. This directive affected several neobanking platforms such as DreamX (Dream11), Fampay, Akudo, and CheqUPI. These platforms were compelled to halt their UPI services due to the absence of a PPI license.
Co-founded by Vineet Gupta and Mukund Rao, Muvin targeted both teenagers and young adults through its prepaid card and mobile app. In January 2022, Muvin secured $3 million in a pre-Series A funding round led by WaterBridge Ventures.
Industry-Wide Impact
This development aligns with a broader trend in the neobanking space, where regulatory interventions have prompted some startups to alter or cease specific services. In a similar vein, Akudo, a teenagers-focused neo-banking platform, also discontinued its core UPI and card business in September of the preceding year following regulatory constraints.
The closure of Muvin’s operations reflects the dynamic regulatory landscape in the fintech sector and its consequences for neobanking startups operating in India.
