The State Bank of Pakistan (SBP) has revoked the in-principle approval and pilot operations approval granted to fintech start-up Tag, effective immediately.
The central bank says it has taken this decision to “protect the interest of the public at large”. It claims it identified violations of its regulatory requirements and “other concerns” while the start-up was operating in the pilot stage of its electronic money institution (EMI) licensing process.
“Tag has been advised to close all customers’ wallets and remove their application from Google’s Play Store and Apple’s App Store and any other platform with immediate effect,” SBP says.
On 4 August, SBP had ordered Tag to “refund all outstanding funds” to its wallet holders “immediately and no later than 19 August”, citing the same reasons.
According to TechCrunch, the start-up has been accused of “forging documents to the central bank”.
The EMI licence would have allowed Tag to offer user-friendly and cost-effective low value digital payment instruments such as wallets, prepaid cards and contactless payment instruments.
Founded in 2020 and headquartered in Islamabad, Tag had ambitions to build “Pakistan’s first truly global financial app” offering an e-money account and a Visa debit card, catering to the unbanked.
Tag was part of Y Combinator’s Summer 2021 batch and had raised $12 million in seed funding one year ago, at a valuation of $100 million.
FinTech Futures has reached out to Tag for a comment.
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