Various surveys undertaken have concluded that perhaps the worst affected are those in the low-income bracket. Particularly, financial stress has hit the working population in distinct ways and India is no exception. RBI also mandated that digital lending platforms which are used on behalf of Banks and NBFCs should disclose name of the Bank(s) or NBFC(s) upfront to the customers.Īn adverse impact of the global pandemic COVID-19 is that many economies world-wide have shrunk and unemployment is on the rise. It had even warned that any violation by banks and NBFCs (including NBFCs registered to operate on ‘digital-only’ or on digital and brick-mortar channels of delivery of credit) will be viewed seriously.Īmidst reports of individuals/small businesses falling prey to growing number of unauthorised digital lending platforms/Mobile Apps on promises of getting loans in quick and hassle-free manner, the RBI again in December last year cautioned consumers never to share copies of KYC documents with unidentified persons, unverified/unauthorised Apps and they should report such Apps/Bank Account information associated with the Apps to concerned law enforcement agencies or use its Sachet portal () to file an on-line complaint. Last June the Central Bank had cautioned Banks and Non-Banking Financial Companies (NFBCs) making use of the Digital Lending Platforms to adhere to RBI’s extant Fair Practices Code (FPC) and Outsourcing Guidelines. Its terms of reference among others includes recommending a robust Fair Practices Code for digital lending players, insourced or outsourced measures for enhanced Consumer Protection, robust data governance, data privacy and data security standards for deployment of digital lending services. The WG which has to submit its report within three months would identify risks posed by unregulated digital lenders and suggest regulatory measures. Nonetheless, it requires sustained efforts in the right earnest to keep them under check.Īgainst the backdrop of a preliminary probe into the financial transactions of the online loan apps which has revealed that there have been 1.4 crore transactions worth nearly Rs 21,000 crore, carried out during the last few months, the setting up of a working group (WG) by the Reserve Bank of India on 13 January this year, to evaluate digital lending activities is laudable ![]() The crackdown against instant money lending apps firms, launched across several of our cities, after six cases of suicides, due to harassment by such companies were reported in Telangana since December 2020, is timely.
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