Digital lending apps have come under the scanner for functioning outside the ambit of RBI’s rules and opening the door to a potential public debt crisis. RBI has intervened, but is it now in danger of over-regulating the sector?
Over the last three months or so, the Reserve Bank of India (RBI) has been carpet-bombing the digital lending space with new rules and regulations. It’s great that this flourishing sector is being regulated, but the RBI should not over-regulate the space so much that it dissuades entrepreneurs and investors from funding and innovating, which will eventually only starve under-served customers of credit. Here’s a look at some of the important RBI interventions, why they were made and the probable outcome.
1. Delinking credit line to prepaid cards
1. Delinking credit line to prepaid cards