Strong-arm tactics, no answer to loan default
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By imposing a hefty fine on an NBFC, the central bank is sending a message to lenders
Many digital apps adopt the “first trap and then embarrass strategy” to entice borrowers with easy loans on usurious interest rates.
Some of these transactions are camouflaged as purchases. What then follows is a virtual blackmailing of the borrower with threat of misusing the data mined from his cell phone. Clearly these apps are also used as eavesdropping softwares.
The RBI is able to regulate only those fintechs who partner with banks or NBFCs. Others are going scot free. But the recent suicide by a victim of the “name and shame” strategy of these digital demons has made the RBI sit up and take notice.
RBI forms working group on digital lending through online platforms, mobile apps [Hindustan Times, New Delhi]
Jan. 13 The Reserve Bank of India has constituted a working group (WG) on digital lending, including lending through online platforms and mobile applications, to study all its aspects in the regulated financial sector and lending by unregulated players, the central bank said in a statement on Wednesday.
The working group has been set up against the backdrop of recent spurt and popularity of online lending platforms and mobile lending apps, which the bank said has raised certain serious concerns which have wider systemic implications.
RBI sets up panel to suggest regulations on digital lending
The 6-member working group has been formed to study digital lending in regulated as well as unregulated financial sector to devise a regulatory framework for the same
BusinessToday.In | January 14, 2021 | Updated 20:08 IST
Reserve Bank of India has formed a working group to suggest ways to efficiently regulate the booming digital lending space. The 6-member working group has been formed to study digital lending in regulated as well as unregulated financial sector to devise a regulatory framework for the same. Digital lending has the potential to make access to financial products and services more fair, efficient and inclusive. While penetration of digital methods in the financial sector is a welcome development, the benefits and certain downside risks are often interwoven in such endeavours. A balanced approach needs to be followed so that the regulatory framework supports innovation while ensuring data security, priv
The working group will study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players so that an appropriate regulatory approach can be put in place.
monitor digital lending in the country.
The group will study the scope of
digital lending in India, identify risks in the sector “posed by unregulated digital lending”.
The group will also set up a Fair Practices Code and recommend measures for data security in the sector. India’s central bank has set up a working group to monitor digital lending in the country. The group consisting of four top members of the Reserve Bank of India and two external members from a fintech firm and a cybersecurity firm will submit their observations of the digital lending sector within three months.