The statement assumes importance in the wake of the recent incidences wherein a few people who borrowed through these apps have been forced to commit suicide and the last week’s incidence of a young pregnant woman being mowed down by the recovery agents of Mahindra Finance which financed her father’s tractor in Bihar.
Since the past two years, when the negative loan app incidents began to surface the central bank had made many changes in the rule book, including mandating the loan apps to upfront disclose on whose NBFC’s or bank’s behalf the money was being disbursed.
Why the RBI has not introduced the first loss default guarantee in the recently introduced guidelines for the lending apps, the governor said, our intention is not to penalize anybody or stifle anyone else activity. All that we are saying is that please follow the traffic rules, Das said.
“The Reserve Bank will continue to be supportive of it (digital lending) and will welcome it. We will, in fact, go two steps forward to discuss with you if you just take one step forward. But having said that, these innovations also must be responsible and should enhance the efficiency and resiliency of the financial system while benefiting the consumer.
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“Robust internal product and service assurance framework together with fair and transparent governance will go a long way to safeguard the interest of customers and ensure long-term sustainability of fintech entities themselves,” Das said.
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