The Reserve Bank of India (RBI) has announced setting up of a working group to evaluate digital lending, including online platforms and mobile apps. The newly formed committee will be suggesting specific regulatory measures pertaining to digital lending, and several other things.
The latest development made by the central bank is to monitor the lending apps that been offering digital loans to underserved customers. Lately, these platforms are under the regulator’s monitoring for their adoption of forceful means of loan recovery.
The RBI stated that while the increasing adoption of digital methods in the financial sector are positive, the benefits and certain risks are often appear in such developments.
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“A balanced approach needs to be followed so that the regulatory framework supports innovation while ensuring data security, privacy, confidentiality and consumer protection. Recent spurt and popularity of online lending platforms/ mobile lending apps (‘digital lending’) has raised certain serious concerns which have wider systemic implications,” said the regulator said. The group has been directed to submit its report within three months.
Both internal and external members will be the part of the external group.. The internal members are RBI executive director Jayant Kumar Dash, chief general manager (CGM)-in-charge of the department of supervision Ajay Kumar Choudhary, and CGMs P Vasudevan and Manoranjan Mishra. The external members are Vikram Mehta, co-founder of peer-to-peer (P2P) lending platform Monexo Fintech and Rahul Sasi, cybersecurity expert and founder of digital risk monitoring firm CloudSEK.
