RBI’s role is to protect the end consumer, so these tech platforms that lend to the end consumers should be regulated like NBFCs, HFCs so as to prevent consumers from data theft, money theft and frauds.
As fintechs have entered the lending space in the country, digital lending norms have become necessary to protect end consumers. The digital norms should clearly lay out what digital lenders can and can not do. There should also be a clear mention of customer’s privacy as digital lending norms in isolation without related privacy norms is not going to help at all, said Ravi Subramanian, Managing Director & CEO, Shriram Housing Finance at the FE BFSI Summit. Like RBI manages NBFCs and HFCs, digital lenders should also be brought under the purview of RBI so they can be audited as well, he added.
Hardika Shah, Founder and CEO of Kinara Capital also echoed that sentiment saying that RBI’s role is to protect the end consumer, and thus, such tech platforms that lend to the end consumers must be regulated such as NBFCs, HFCs so as to prevent consumers from data theft, money theft and frauds. Jairam Sridharan, Managing Director, Piramal Capital & Housing Finance said that the norms should be designed in a way to protect three things: the end consumer, safety and stability of the financial system, and the strategic interest of the country. The regulator is aware of all these areas and we are moving in the right direction for these regulations, he added.
Talking about whether the recent surge in digital transformation of NBFCs is driven by the pandemic, Ravi Subramanian stated that it would be wrong to say that the pandemic alone has driven the digital transformation. “Even before the pandemic, most of the organisations had a two to three year digital transformation plan for how they want to digitise their business. What the pandemic has done is, it has increased customer’s readiness to adapt to technology. That’s made it easier for the organisations,” he said.
Source-https://www.financialexpress.com/industry/banking-finance/fe-modern-bfsi-summit-digital-lenders-must-be-brought-under-purview-of-rbi-to-protect-end-consumers/2564443/