RBI instructs Buy-Now-Pay-Later fintech Simpl to suspend payment operations, cites irregularities and compliance issues

The Reserve Bank of India (RBI) has instructed Bengaluru-based buy-now-pay-later (BNPL) fintech Simpl to stop all payment operations with immediate effect, citing the absence of the required authorisation under the Payment and Settlement Systems (PSS) Act, 2007.

The order, issued to Simpl in a September 25, 2025, letter, directs the company to discontinue all business operations related to payment, clearing, and settlement services.

The RBI says that Simpl has been functioning as a payment system operator without obtaining the mandated Certificate of Authorisation, which is a requirement under the PSS Act.

Any operation without the proper authorisation is against the laws of the land and gives rise to the central bank intervening into its activities.

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RBI Intervention

The RBI’s move follows proceedings initiated by the Enforcement Directorate (ED) against Simpl and its founder-director, Nithyanand Sharma, in July under the Foreign Exchange Management Act (FEMA), 1999.

The ED alleges foreign exchange irregularities worth nearly ₹914 crore. Investigations say that Simpl, which is registered as One Sigma Technologies Pvt Ltd, had raised foreign capital in the name of offering technology services but diverted these funds into the financial services business without getting prior approval from the regulator, violating India's foreign direct investment (FDI) rules.

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Simpl Business Model So Far

Simpl, co-founded by Nitya Sharma (former Goldman Sachs VP) and Chaitra Chidanand (who left in 2020), provides Buy-Now-Pay-Later (BNPL) solutions to customers on e-commerce, food delivery, travel and various quick commerce platforms.

Customers can checkout immediately and pay afterwards, usually within 15 days with no interest. It has partnerships with more than 26,000 merchants like Zomato, BigBasket, Rapido, and Box8. Simpl, over time, has raised approximately $83 million from investors such as DIA Investments, Hard Yaka, FJ Labs, and Valar Ventures.

Unlike some BNPL companies that buy NBFC licenses, Simpl had declared itself a payments utility, similar to an old-fashioned ledger ("khata") system. Still, the RBI argues that its activities, comprising of payments, clearing, and settlement, squarely fall within the PSS Act regulatory purview, rendering the authorisation obligatory.

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