The Reserve Bank of India (RBI) on Thursday said it has cancelled the certificate of registration (CoR) of P C Financial Services primarily engaged in mobile app-based lending operations through an app ‘cashbean’ on account of supervisory concerns. Additionally, the company indulged in unauthorised use of logos of Reserve Bank and Central Bureau of Investigation for recovery from the borrowers in gross violation of the Fair Practices Code, the RBI said.
This marks the latest instance of central bank tightening rules on app-based lenders, many of which have been operating in violation of prudential norms. The working group which was headed by RBI Executive Director Jayant Kumar Dash recommended setting up a nodal agency which will primarily verify the technological credentials of lenders in the digital lending ecosystem and also the constitution of a Self-Regulatory Organisation (SRO) covering these participants. With the cancellation of CoR, the RBI said New Delhi-based P C Financial Services Pvt Ltd will not transact the business of a non-banking financial institution (NBFI). “In exercise of the powers conferred under Section 45-IA (6) (iv) of the Reserve Bank of India Act, 1934, the Reserve Bank has cancelled the Certificate of Registration (CoR) issued to M/s P C Financial Services Private Limited, New Delhi,” RBI said in a statement.
The RBI further said the company was also found to be “charging usurious rate of interest” and other charges to its borrowers in an opaque manner apart from indulging in unauthorised use of logos of the RBI and the Central Bureau of Investigation for recovery from the borrowers in gross violation of the Fair Practices Code.
RBI cancels registration certificate of app based lender PC Financial services
