RBI Governor Das Warns Digital Lenders To Operate Within Permitted Territory

The Reserve Bank of India Governor Shaktikanta Das on Friday said that it will very soon come out with regulations on the issue of digital lending which will take into account the concerns around excesses by some players and also ensure that innovation is not impacted.

Governor Das expects licensed entities to operate within the permitted territory.

Last month, the RBI issued a directive asking non-bank fintech not to provide credit lines onto prepaid payment instruments (PPIs) like wallets and prepaid cards. This set the cat amongst the pigeons. It threatened the operating business models of several new-age financial platforms, which realised they would need to pivot to survive.  

Moneycontrol reported that Tiger Global-backed fintech, Slice, has already sought the RBI's permission to issue credit cards through its registered non-banking finance company (NBFC) Quadrillion Finance. This app adheres to RBI's recently updated Master Direction, which states that entities wanting to issue credit cards shall require a Certificate of Registration and a minimum net-owned fund of Rs 100 crore. 

“Our responsibility is to ensure financial stability. If we have given a licence to a particular entity, we expect them to operate within that domain. If they want to do something over and above that, they need to seek permission from us (RBI). If they are building anything beyond what their licence permits, then it is not acceptable. We cannot allow a scenario where risk is building up," Das said at an event organiised by Bank of Baroda.