S&P Global Ratings on Tuesday said India's financial system regulator, the RBI, is showing serious commitment to improving governance and transparency in the sector.
RBI's measures include restraining IIFL Finance Ltd and JM Financial Products Ltd from disbursing gold loans and loans against shares, respectively, and asking Paytm Payments Bank Ltd (PPBL) to stop onboarding of new customers.
S&P said some retail loans, such as personal loans, loans against property, and gold loans, may be diverted to invest in stock markets. It is difficult to ascertain the end-use of money in these products, but market participants believe that the RBI and market regulator Securities And Exchange Board of India want to protect small investors by scrutinising these activities more cautiously.
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