Reserve Bank of India (RBI) has set up a Working Group to study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players so that an appropriate regulatory approach can be put in place.
The Working Group will consist of both internal and external members, said RBI in a statement on Wednesday.
The internal members include Jayant Kumar Dash, Executive Director, RBI (Chairman), Ajay Kumar Choudhary, Chief General Manager-in-Charge, Department of Supervision, RBI, P. Vasudevan, Chief General Manager, Department of Payment and Settlement Systems, RBI, Manoranjan Mishra, Chief General Manager, Department of Regulation, RBI (Member Secretary).
The external members include Vikram Mehta, Co-founder, Monexo Fintech, Rahul Sasi, Cyber Security Expert and Founder of CloudSEK.
Last month RBI had cautioned against unauthorised Digital Lending Platforms/Mobile Apps.
There have been reports about individuals/small businesses falling prey to the growing number of unauthorised digital lending platforms/Mobile Apps on promises of getting loans in a quick and hassle-free manner.
These reports also refer to excessive rates of interest and additional hidden charges being demanded from borrowers, adoption of unacceptable and high-handed recovery methods and misuse of agreements to access data on the mobile phones of the borrowers.
The Terms of Reference (ToR) for the Working Group include, evaluation of digital lending activities and assess the penetration and standards of outsourced digital lending activities in RBI regulated entities.
The Working Group will also identify risks posed by unregulated digital lending to financial stability, regulated entities and consumers.
It will also suggest regulatory changes, if any, to promote orderly growth of digital recommend measures, if any, for expansion of specific regulatory or statutory perimeter and suggest the role of various regulatory and government agencies.
It will recommend a robust fair practices code for digital lending players, insourced, or outsourced. Also 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 Group has been advised to submit its report within three months.
The Working Group is formed to regulate the unacceptable recovery method of unauthorised mobile lending apps.
( With inputs from ANI )
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