Digital lenders affected by sudden loan restrictions will meet with officials from the Ministry of Electronics and Information Technology and other departments at 2 p.m. on Wednesday to discuss the regulatory move, according to people familiar with the matter.
A total of about 14 to 15 lenders will be attending the meeting alongside industry executives whose firms may not have been directly affected by the restrictions, the people told BQ Prime on the condition of anonymity as information is not public yet.
While the government had initially compiled a list of platforms that would face restrictions, officials acknowledged that some prominent names have also appeared on the list and merit review, one of the two people said.
Lack of clarity has persisted about the matter but the RBI offered a partial explanation in the press conference following the monetary policy announcement on Wednesday.
“RBI’s certificate of registration holders are NBFCs. In turn, those NBFCs use a lot of apps. We asked the NBFCs for a list of apps they use because there are many illegitimate lenders in the market as well that are not associated with any NBFC,” Governor Shatikanta Das said in response to a question. “We have submitted a list of apps used by NBFCs to the government. On that basis, the government has taken this step.”
Fintech lenders have been asked to submit details such as their current shareholding pattern, data security measures, app security measures, data storage practices, and grievance redressal mechanisms, according to the second person mentioned earlier.
Kissht, LazyPay, Kreditbee, and others appeared to have been swept up in a government crackdown on digital lending and gambling applications that started on the evening of Feb. 5.
The government had blocked 232 apps operated by overseas entities, including those based in China, for being involved in betting, gambling, and unauthorised loan services. The Ministry of Electronics and Information Technology has issued orders to block these apps, following instructions from the Ministry of Home Affairs.
Moves like this could dampen investor interest in the fintech sector and make it harder for smaller players to survive by raising compliance costs, the second person mentioned earlier said.