- Says action has been taken after identification of violations of SBP’s regulatory requirements and other concerns during the pilot operations
In a major development, the State Bank of Pakistan (SBP) on Thursday advised fintech TAG Innovation Pvt. Ltd., currently in pilot stage of its Electronic Money Institution (EMI) licensing process, to refund all outstanding funds to its wallet holders immediately, but no later than August 19, 2022.
"This action has been taken after identification of violations of SBP’s regulatory requirements and other concerns during the pilot operations of M/s TAG," said the SBP in a brief statement.
"EMI licences are issued by SBP to non-bank entities in three stages i.e. In-Principle Approval, Pilot Operations Approval and Commercial Operations Approval. Moreover, a pilot operation is conducted to assess the readiness of the business for commercial operations and only after its successful completion (is a) licence to commence commercial operations granted to the respective EMI," the SBP added.
TAG is a mobile application that allows its users to open mobile wallets and get debit cards. The app’s users can use it to perform online transactions such as money transfers, bill payments and mobile top-up payments with a touch.
The startup was granted pilot approval by the SBP in August 2021 after the in-principal approval from the central bank in November 2020.
The fintech received $12 million from international investors, it was reported in September last year, as it eyed to enhance its digital payments business in the country.
The funding was led by Liberty City and also included Addition LP, Mantis Venture Capital and Banana Capital LP, Bloomberg had quoted founder Talal Ahmad Gondal as saying.
Previous investors in the pre-seed round were Quiet Capital and Fatima Gobi Ventures. Polymath Digital doubled down in this round while Khwarizmi Ventures and the co-founder of Plaid William Hockey also participated, said the report, which added that the funding put the company at a valuation of $100 million.