According to two senior industry insiders, the digital lending sector is reaching out the Reserve Bank of India with a plea for relaxation of the tightened regulations pertaining to unsecured banking. Since their partner non-banking finance companies (NBFCs) discontinued offering short-term credit products, fintech lending platforms—also known as loan service providers, or LSPs—have been directly impacted. According to industry insiders, consumers who actually need short-term loans may be get pushed to offline moneylenders as a result of the removal of such products.
“In order to determine how the RBI’s position affects interest rates locally, we are collecting data. In addition to meeting with senior bankers and other non-bank officials, we have also requested a meeting with the RBI’s Department of Regulations,” one of the executives stated. “The topic of short-duration loans was discussed in detail at a meeting that was held towards the end of last year with all the stakeholders of the digital lending industry, from banks to NBFCs,” he added.
“The same issue was raised at the January 7 meeting held in New Delhi with the Department of Financial Services Secretary and lending companies as well,” he stated.
A turning point for digital lending?