The Reserve Bank of India (RBI) is examining several digital wallets linked to electric vehicle (EV) platforms following the collapse of the country's largest all-EV taxi service, which left users unable to access funds stored in their accounts, according to individuals familiar with the matter.

The review of payment mechanisms within India's EV sector was prompted by issues faced by users of BluSmart's app-based ride-hailing service and digital wallet. The incident, which followed fraud allegations against the company, has raised concerns about the lack of consumer safeguards for funds stored in closed-loop wallets used for services such as ride bookings and EV charging.

The RBI has started informal discussions with EV charging-point operators and other app-based EV platforms to assess possible risks to consumers, said the individuals, who requested anonymity as the matter is not public.

Closed-loop wallets - payment systems limited to use within a single platform - are increasingly common in India's digital services sector. Unlike open-system wallets, which are directly regulated by the RBI, these wallets are not subject to the same level of oversight, which may increase vulnerability in the event of service disruptions.

After the service suspension, many BluSmart users who had deposited funds into the platform's wallet for airport and local travel bookings were unable to retrieve or transfer their balances. In April, the company informed users that the refund process could take up to 90 days.

The RBI did not respond immediately to a request for comment sent via email.

The central bank is also said to be considering a meeting with the involved parties in the coming weeks, according to individuals familiar with the situation.

Proposals being considered include mandating escrow arrangements for consumer funds, similar to those required for payment aggregators, to ensure protection in the event of business closure. Another option under review is applying selected provisions from the RBI's Prepaid Payment Instruments (PPI) guidelines to large-scale closed-loop wallets, the individuals said.

While no formal decision has been made, potential regulatory changes affecting app-specific wallets could impact India's digital economy, where many platforms rely on prepaid balances to maintain user engagement and usage frequency.