Menu Close

FinTechs: 94 Digital lenders face Indian regulators on firms’ shareholding structure

*Panic-stricken FinTechs face the Indian Ministry of Electronics and IT to submit regulatory documents indicating details, including their Board composition pattern and ultimate beneficiaries of the firms operating lending apps in the country

Gbenga Kayode | ConsumerConnect

The regulators’ ban on 94 quick-loan apps has caught the Indian digital-lending industry in a quagmire.

ConsumerConnect gathered that Senior Executives of FinTechs likely to be affected by the ban order and officials from the Ministry of Electronics and Information Technology (MeitY) had continued their ‘hectic discussions’ with government officials Wednesday, February 8, 2023.

The much troubled Financial Technology companies (FinTechs) are rushing to submit their shareholding pattern to the Centre, ETtech report said.

The government ban on quick-loan apps with China links had a domino effect on Indian digital-lending apps.

Fearing that their names may figure in the final list of ban, the troubled digital-lending platforms are submitting their shareholding pattern to the Indian Government.

It was learnt that they also need to present certificates to prove they are regulated by the Reserve Bank of India (RBI).

The country’s Ministry of Electronics and IT has sought documents to verify details, such as the Board composition of these lending platforms, and the ultimate beneficiaries of the companies operating lending apps.

Separating the grain from the chaff

Officials were asked to have asked FinTech firms about their investors and capital structure.

A source, who is aware of the discussions held Wednesday, noted: “It seems that through discussions and various questions, MeitY is trying to find out whether any of the apps have Chinese partners or investors.

“The ministry is basically trying to cull out the good ones from the bad actors,”

Comments by Reserve Bank of India

Meanwhile, the Reserve Bank of India has said it asked NBFCs to submit a list of apps being operated by them.

This was subsequently passed on to the government, report said.

RBI Governor Shaktikanta Das said: “Based on the list, the government has made its move.”

In a meeting chaired by Finance Minister Nirmala Sitharaman September 2002, had decided that RBI would prepare a whitelist of legal digital-lending apps

MeitY also would ensure that only the whitelisted apps are hosted on app stores.

Kindly Share This Story




Kindly share this story