RBI report urges new nodal agency, SRO, to impose illegal sanctions on law

RBI report urges new nodal agency, SRO, to impose illegal sanctions on law

The report of a working group set up by the Reserve Bank of India (RBI) on digital lending, including lending through apps and digital platforms, has recommended setting up of a nodal agency to monitor the technical credentials of digital lending apps. will verify. It has also called for the creation of a self-regulatory organization and legislation to curb illegal lending activities.

In its recommendations, the Working Group said, “A nodal agency should be set up to verify the technical credentials of Digital Lending Apps (DLAs) of Balance Sheet Lenders and Loan Service Providers (LSPs) primarily operating in the digital lending ecosystem.” will do.” The nodal agency suggested in the report will be tasked with maintaining a public register of verified apps on its website.


It also said that balance sheet lending through DLAs should be restricted to entities regulated and authorized by RBI or to entities registered under any other law exclusively for lending business.

In addition, the Working Group has suggested setting up of self-regulatory organizations covering the participants in the ecosystem. In the medium term, the working group has suggested that the central government may consider bringing in a law to curb illegal lending activities by introducing the ‘Prohibition of Irregular Lending Activities Act’.

When it comes to technical aspects, the RBI Working Group has said, each DLA should have publicly available policies with regard to data storage, its use and privacy, and the data should be stored in servers in India.

“Data should be collected from the borrower/potential borrower with prior information on the purpose, use and implications of such data and in an auditable manner with the explicit consent of the borrower”, the report said.

It has also suggested that an adaptive comprehensive regulatory framework for fintech and techfin should be considered in the medium term. “Algorithms used for underwriting should be auditable and lenders should ensure that the output from such algorithms is woven into the ethical AI design”, it said.

In addition, the report said, every digital lender will have to provide a key fact statement in a standardized format, including the annual percentage rate.

                                                    </div><div style="background: #fee8dd; padding: 12px; border: dashed 1px black; margin-bottom: 20px;">

mail Dear reader,

Business Standard has always worked hard to provide updated information and commentary on events that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only reinforced our resolve and commitment to these ideals. Even during these difficult times arising out of COVID-19, we are committed to keeping you informed and updated with relevant news, authoritative views and sharp comments on relevant relevant issues.
However, we have a request.

As we grapple with the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. Subscribing to more of our online content can only help us achieve our goals of providing you with better and more relevant content. We believe in independent, unbiased and credible journalism. Your support through more subscriptions can help us practice the journalism we’re committed to.

support quality journalism and Subscribe to Business Standard,

digital editor

,

—-*Disclaimer*—–

this is an unedited and auto-generated supporting article of the syndicated news feed are actualy credit for owners of origin centers. intended only to inform and update you about Sakari naukri , result , UPSC , Exam Jobs etc. for Provides real or authentic news. also Original content may not have been modified or edited by Rojgar samachar team members.

Leave a Reply