17 Jun 2022 , 01:38 PM
The Reserve Bank of India (RBI) would issue guidelines to control digital lending “shortly,” according to the central bank governor, who also condemned the rowdy behaviour of loan recovery agents in both regulated and unregulated organizations.
“The RBI-working group’s recommendations on digital lending are in a very advanced stage of scrutiny, and the rules will be announced very soon,” Shaktikanta Das said at a Mumbai event.
In January 2021, the RBI formed a working group to investigate and recommend restrictions for digital lending apps.
The working group proposed stricter standards for digital lenders in November 2021, including subjecting digital lending apps to a verification process by a nodal agency to be established in consultation with stakeholders, as well as the establishment of a self-regulatory organization that would cover all participants in the digital lending ecosystem. These guidelines have yet to be finalized by the RBI.
Concerns about company conduct and customer safety arose as a result of a surge in digital lending, prompting the formation of the group.
Separate legislation was proposed by the group to combat unlawful digital lending. It also suggested that certain baseline technological standards be developed and that compliance with those standards is a requirement for businesses offering digital lending solutions.
Another issue attracting the RBI’s attention in the context of customer service is the employment of harsh recovery procedures by certain lenders who lack proper checks and controls over their recovery agents, Das said today.
Customers have reported being approached by recovery agents at strange hours, even past midnight, according to the central bank. Recovery agents have also been accused of using derogatory language. Such actions by recovery agents are “inappropriate” and pose a “reputational risk” to financial institutions, according to the governor.
“In terms of our monitored and regulated firms, the RBI would take this problem extremely seriously,” Das added. He stated that the RBI is in contact with banks and shadow lenders and has made them aware of the problem.
Related Tags
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.