Governor Shaktikanta Das on Tuesday issued a warning against the mushrooming of lending apps and their usurious recovery prices, saying that the Reserve Bank is not interested in punishing operators or stifling innovation but rather wants them to play by the rules.
Speaking this evening at the third global fintech summit, he said that the central bank's goal is to make sure that everyone abides by the rules of the road rather than to punish or stifle anyone.
The statement assumes importance in the wake of the recent incidences wherein a few people who borrowed through these apps have been forced to commit suicide and the last week's incidence of a young pregnant woman being mowed down by the recovery agents of Mahindra Finance which financed her father's tractor in Bihar.
Since the past two years, when the negative loan app incidents began to surface the central bank had made many changes in the rule book, including mandating the loan apps to upfront disclose on whose NBFCs or bank's behalf the money was being disbursed.
Why the RBI has not introduced the first loss default guarantee in the recently introduced guidelines for the lending apps, the governor said, our intention is not to penalise anybody or stifle anyone else's activity. All that we are saying is that please follow the traffic rules, Das said.
Digital lending will continue to receive support from and support from the Reserve Bank. If you just move forward one step, we'll move forward two steps to talk with you. Having said that, these innovations also need to be responsible and should improve the financial system's efficiency and resilience while also helping the consumer.
Robust internal product and service assurance framework together with fair and transparent governance will go a long way to safeguard the interest of customers and ensure long-term sustainability of fintech entities themselves, Das said.
(with inputs from PTI)
