Central bank of India, RBI on Wednesday announced its plan to set up a working group on digital lending, including through online platforms and mobile apps. The committee will be responsible for regulating all the digital lending to protect the user’s belief on digital evaluation and for suggesting specific regulatory measures in the realm of digital lending, among other things.
The cases of fraud have increased in a few months and Reserve Bank of India takes conscience over the issues by studying all aspects of digital lending activities in the regulated financial sectors as well as by unregulated players.
The RBI stated in its report, “digital lending has the potential to make access to financial products and services more fair, efficient, and inclusive. From a peripheral supporting role a few years ago, FinTech-led innovation is now at the core of the design, pricing and delivery of financial products and services.”
Notification reads that while penetration of digital method in the financial sector is a welcome development, the benefits and certain downside risks are often interwoven in such endeavour.
The responsibilities are given to the Working Group Committee including evaluate digital lending activities and assess the penetration and standard of outsourced digital lending activities in RBI regulated entities.
“To secure data privacy, security, and consumers’ confidentiality, this innovation has to be taken so that investment through the digital platform will be made secure. Digital platform is something which required high safety measure regarding investment and consumer protection. It would help to intervene such unregulated activities.”
It will also recommend measures for expansion of specific regulatory or statutory perimeter and suggest the role of various regulatory and government agencies.
The Working Committee will be represented by both internal and external members and will have to submit its report within three months.
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