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    RBI Cancels Licence of Acemoney For Non-Compliance With Guidelines

    The Reserve Bank of India (RBI) has cancelled the Certificate of Registration (COR) of Acemoney (India) Limited, a Non-Banking Financial Company (NBFC), for non-compliance with RBI’s guidelines. According to a press release issued on April 29, RBI cancelled Acemoney’s licence for violating RBI guidelines on risk management and flouting the official code of conduct when outsourcing its digital lending operations to third-party apps. The company also ignored regulations by charging excessive interest and failed to safeguard the confidentiality of customer information. The company’s NBFC certificate was first granted in 2017.

    The release states that the company operated 34 services or apps with names such as ActLoan, CashLender, QuickRupee, most of which appear to be related to loans. According to a 2023 RBI document, Acemoney was registered as a Non-Deposit taking Non-Banking Financial Company (NBFC), classified as an Investment and Credit Company (ICC) in the ‘base’ layer (assets less than Rs.1000 crore).

    An Inc42 report from 2022 named Acemoney as one of the NBFCs that was being investigated by the Enforcement Directorate (ED). Reportedly, Chinese entities would use the defunct NBFC licences of companies like Acemoney and operate illegal lending apps in India. The nation’s central bank has been turning the heat up against malpracticing NBFCs, especially lending apps. In February last year, the regulator cancelled the licenses of two lending apps – Kudos Finance and Investments Private Limited and Credit Gate Private Limited. Kudos was an app that reportedly worked with Chinese predatory lending apps. 

    The RBI also released a draft framework for self-regulatory organisations (SROs) for regulated entities such as banks and non-banking financial companies (NBFCs) last year. In light of such predatory organisations, a self-regulating fintech sector may pose risks to people’s savings, a point Medianama made here.

    Last week, the Reserve Bank of India released the new draft guidelines for a comprehensive regulatory framework for web-aggregators of loan products. These include:

    • Provide information on all available loan offers
    • Follow a consistent approach to indicate willingness to offer loans
    • Provide necessary information on loans offered
    • Products should be displayed in an unbiased manner

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    The post RBI Cancels Licence of Acemoney For Non-Compliance With Guidelines appeared first on MediaNama.

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