NBFC licence
Every Fintech nowadays is running to get a NBFC licence to provide service like loan & insurance isn't the market already getting cluttered & They are just focusing on increasing their loan book & with huge default isn't that gonna impact the whole ecosystem? Has RBI turned a blind eye just because these fintech now have NBFC licence
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There are still lakhs of people in India who are doing legitimate business, need a loan but don’t know how to go about it or banks don’t give it to them. There is still space for more players
Has RBI turned a blind eye just because these fintech now have NBFC licence? Not really.
If you look at most of the developed economies of the world, they are all credit-driven. This allows their respective regulators to govern the economy better by adjusting key indicators affecting the economy. RBI understands that. It also knows that in India there are <10% of users who have access to credit and a large customer base still doesn't have access to credit. RBI is open to any company or bank that caters to the New-To-Credit (NTC) customer base. But at the same time, they also want to ensure that the loans disbursed are not subprime, customers' financial information is well protected, and the money is not used for illegal purposes. To that extent, they have proposed Digital Lending Guidelines in 2022 to create a baseline for how and to whom these loans can be given.
If I consider that perspective, I believe RBI is doing the right job of allowing FinTechs to acquire NBFC licenses.
+1 to @AGentleGiant's response 🙌