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RBI asks Google, DLAI, FACE for inputs to regulate loan apps: Report

In January, Google said it reviewed hundreds of personal loan apps in India and those who were found violating the user safety policies were immediately removed from its play store.

March 12, 2021 / 11:50 AM IST

In a bid to regulate digital loan applications, the Reserve Bank of India (RBI) has sought inputs from Google, the Digital Lenders Association (DLAI), fintech association FACE and several non-bank lenders, reported The Economic Times, citing three people aware of the development.

The central bank has sought details from Google on its criteria for eligibility of fintech loan application on its app store and the parameters followed by these apps.

“The RBI working group has been seeking a lot of suggestions from industry groups, Google and lenders engaged in business with digital lenders to put in place elaborate regulations for these platforms,” said one of the officials.

Moneycontrol could not independently verify the report.

“There is a unanimous effort from all stakeholders that the RBI regulates all forms of digital lending, even for those that are currently outside the purview of the regulator.”

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In January, Google said it reviewed hundreds of personal loan apps in India and those who were found violating the user safety policies were immediately removed from its play store.

RBI, on January 13, announced an internal working group to study digital lending activities so that an appropriate regulatory framework can be formed.

"Recent spurt and popularity of online lending platforms/ mobile lending apps ('digital lending') has raised certain serious concerns which have wider systemic implications," the central bank said in the statement.

The report added that industry associates have submitted their inputs to the working group and have recommended organising a self-regulatory framework for the digital lending ecosystem and requested the regulator to develop an industry-wide code of conduct to guarantee moral behaviour in digital lending.

“There can be better use of technology to monitor the operations of unlawful lending entities,” an industry executive requesting anonymity told the publication. “Payment gateways that come under the ambit of the central bank can also improve monitoring standards to prevent these players from unlawfully gaming the system. RBI can enforce tighter mechanisms to ensure PGs that onboard such lenders can tighten their vetting processes.”
Moneycontrol News
first published: Mar 12, 2021 11:36 am

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