With an RBI Deputy Governor expressing his displeasure on the ways and means adopted by digital lenders for collecting repayments from defaulting borrowers, the fledgling fintech lending industry fears further scrutiny from the regulator
October 25, 2021
5 Min Read
The importance of ‘digital’ in credit delivery mechanisms is not a point of debate anymore. But the conduct and governance standards of fintech lenders have shaken the trust reposed in the digital means of finance, Reserve Bank of India Deputy Governor Rajeshwar Rao said at a public event recently.
That speech is a point of concern for India’s fledgling fintech lending industry. Senior industry executives say if this regulatory stand translates into higher scrutiny from RBI, business could slow down further for the sector.
The non-banking financial companies, or NBFC, sector has been in the news for the wrong reasons recently—including the corporate defaults of Srei and Dewan Housing Finance Corporation, and illegal collection procedures adopted by tech lenders.
The technology-led lending sector was born with a promise to organize the lending business and bring borrowers out of the clutches of offline moneylenders. But, like their NBFC counterparts, they too have been repeatedly in the spotlight for governance and conduct issues.
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