Bengaluru
The Reserve Bank of India on Tuesday raised concerns over the growing unethical loan recovery practices, usurious interest rates and data privacy issues. It also flagged certain material concerns regarding the mushrooming of digital lending apps.
RBI Governor Shaktikanta Das said the need of the hour is to ensure safety following a process of whitelisting and due diligence by the regulated entities.
The RBI, in association with other relevant agencies, is taking steps to address this issue and take further steps as may be necessary, he said.
Speaking at the Global Fintech Festival held in Mumbai, the RBI governor said, While innovations are very much welcome, they must be responsible and should enhance the efficiency and resiliency of the financial system while benefiting the consumers.
The level of due diligence and oversight exercised by the regulated entities on their outsourced activities needs to be strengthened further. This would help in proactive mitigation of risks at the incipient stage itself, he added.
The RBI has come up with digital lending guidelines that mandate digital lending platforms to disclose the names of the banks/NBFCs upfront on whose behalf they were providing credit. He also said the pandemic accelerated the push toward digitalisation, especially in rural areas.
The period from March 2020 to August 2022 has seen a massive growth of 427 per cent in UPI transactions, which reached a new high of 657 crore transactions in August 2022 alone.
