The Reserve Bank of India (RBI) has set-up a working group (WG) to study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players.
The move is aimed at regulating the sector as the recent spurt and popularity of online lending platforms/ mobile lending apps has raised certain serious concerns which have wider systemic implications.
According to RBI, the WG would look to evaluate digital lending activities and assess the penetration and standards of outsourced digital lending activities in RBI regulated entities. It would also identify risks posed by unregulated digital lending to financial stability, unregulated entities, and consumers will suggest regulatory changes, if any, to promote orderly growth of digital lending.
Further, the WG will recommend measures, if any, for the expansion of specific regulatory or statutory perimeter and suggest the role of various regulatory and government agencies. In addition, the WG would also recommend a robust fair practices code for digital lending players, insourced or outsourced, suggest measures for enhanced consumer protection; and recommend measures for robust data governance, data privacy, and data security standards for deployment of digital lending services.
The WG will comprise four internal members of RBI including executive director Jayant Kumar Dash, Ajay Kumar Choudhary, chief general manager-in-charge, department of supervision, P. Vasudevan, chief general manager, department of payment and settlement systems, and Manoranjan Mishra, chief general manager, department of regulation. External members will include Vikram Mehta, co-founder, of Monexo Fintech, and Rahul Sasi, cyber security expert and founder of CloudSEK.
The WG will be submitting its report within three months.
