Rao also said that unbridled third party affiliations, misselling, data privacy breaches, unethical recovery practices and exorbitant interest rates prompted the RBI to regulate digital lending activities.
Speaking at an event organized by industry group Assocham, Rao said, “The framework is designed to strike a balance between the need for an innovative and inclusive system, while also ensuring that regulatory arbitrage is not exploited for the interests of the customer.” is done.” ,
The deputy governor also said that the digital lending framework is completely dependent on the regulated entities on whose behalf the apps lend. “They have to ensure that the loan servicing facilitators and digital lending apps with which their outsourcing tie-up works within the regulatory ecosystem not only in letter but also in spirit,” Rao said.