One bad apple spoils the entire basket,” says the founder of a Mumbai-based financial technology company that is into digital lending. This young start-up entrepreneur is talking about overambitious fintech players who are chasing unbanked customers without proper risk assessment just to gain volumes and resorting to unethical collection and recovery practices. He gives an example of a Gurgaon-based fintech company they were planning to buy a year ago and which they found was accessing borrowers’ contact details at the time of onboarding through its app. “People, when they need money, give permission to apps that seek access to contacts, SMSes, location,” he says. The company was using these details for loan recovery by calling up borrowers’ friends and family members. When the start-up founder questioned the company executives saying the practice was against the Reserve Bank of India's (RBI’s) fair practices code, the response was: “Nobody notices. So far, we haven’t faced any issue with the regulator on this.”
Such over-confidence stems from the fact that fintechs registered as NBFCs are loosely regulated whereas pure technology companies (which generate business leads for banks and NBFCs) are not even required to register with the RBI.
This is about to change. The RBI is slowly realising the extent of these malpractices as fintech, with the passage of time, come to occupy a bigger and bigger space in the financial services industry.
RBI's Red Flag
Denne historien er fra September 06, 2020-utgaven av Business Today.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra September 06, 2020-utgaven av Business Today.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
The EV Craze
The country’s growing luxury car market is seeing a shift with environmentally-conscious consumers betting on electric vehicles as a sustainable travel option. Though just 6%, the share of EVs in the luxury segment is rising rapidly
The Storage Boom
Data centres are being built at a frenetic pace in india as companies scramble to meet the ballooning demand from mobile phone users and firms adopting al. Can the country’s energy infrastructure keep up?
India Beckons
Owing to rising incomes in India and overall wealth expansion, luxury brands are wooing the country like never before
The Pearls of The Sea
Caviar, that rare food, is considered the epitome of fine dining. Here is everything that you need to know about it
66.Brand persona should define the core"
I’d say this was a strategic pivot. We had an iconic brand, but had, over time, evolved into diversified lines of businesses that could no longer be represented within the confines of our ‘name’.
Unwind in Style
Here is acomprehensive list of top tech picks that help you unwind by blending perfection in performance with luxury
A Lifelong Affair with Inspiration
In my art journey, the diversity of my acquisitions mirrored the expanding horizons of my understanding of art
Make it Bubbly
Champagne is much more than just a symbol of celebration and success. Know about its nuances beyond the bubbles
Palatial Splendour
Buoyed by renewed demand, sales of the glitzy mansions of the ultra-rich are surging like never before. Real estate majors are looking to capitalise on this by launching luxury offerings in record numbers
Of Beaches and Cream
GianChand Single Malt Whisky