FACE applies to RBI to take on the role of a self-regulatory organisation
FACE member-companies cater to more than half of the consumer lending market volumes in India
FACE, India’s only Digital Lenders industry body, announced today that they have applied to RBI to take on the role of a Self-Regulatory Organization (SRO) in the digital lending industry. FACE member-companies cater to more than half of the consumer lending market volumes in India. The organization has been working closely with regulators, official stakeholders, industry players, and other consumer groups to address the need for proactive consumer empowerment, including financial literacy, consumer protection and the challenge of working with regulators in dealing with fringe-elements that hurt consumer trust in the system.
SROs are non-governmental organizations that set and enforce rules and standards relating to the conduct of entities in their respective segments. FACE’s application comes on the back of RBI seeking suggestions from industry groups to enforce regulations for digital lending platforms in the country, in an effort to curb illegal lending apps. According to RBI, an SRO in the industry will be the most suited entity to regulate the ecosystem that will help in establishing good practices among the digital lenders and prevent fraud and exploitation of consumers while ensuring steady growth of the overall sector.
“We, at FACE, intend to work with the RBI and all official stakeholders to promote responsible lending, which will uphold ethical lending practices, data security, cyber security, consumer privacy and to weed out predatory lenders. With our expertise and collective addressable market, we believe FACE is well prepared to take on the task of a formal self-regulatory body, that can promote and refine practices and streamline the sector, with guidance from the RBI. Our application to RBI is an important milestone for us and a first step towards building a responsible lending ecosystem, as credit access increases Multi fold with digital usage in India. With responsible financial practices, we believe that financial impact can contribute to growth of our GDP.” said Mr. Ram Rastogi – Governance Council Member at FACE and a Digital Payments Strategist & a Thought Leader in Financial Services, FACE.
FACE members have been a key part of the Fintech lending ecosystem in India for the preceding 4 years and serve a cumulative consumer base of over 90 lakh consumers across 19,000 Pin-codes in India. These members uphold and abide by FACE’s code of conduct which guides them to implement responsible and ethical lending practices. It creates common safeguards in customer interest to provide an appropriate solution to any hurdles or risks, thus helping FACE attain a level of transparency with customers and fair business practice with the members. More member-companies are being onboarded to add value to the purpose and objective of this body. As a good governance model, FACE has senior and experienced professionals from various spheres across the industry, who form the honorary Advisory Council.
Digital lending has emerged as one of the key sectors which have found tremendous approval amongst the consumers specifically amidst consumers who otherwise do not have access to the traditional forms of credit. However, the lack of a regulatory body has allowed the entry of illegal apps that are exploiting consumers and an SRO is the immediate need of the hour that can resolve this issue in the long term.