RBI cancels registration of Datta Finance over digital lending violations
The RBI has cancelled the certificate of registration of Datta Finance and Trading Pvt Ltd for violating guidelines on outsourcing core functions in digital lending. The company will no longer operate as an NBFC following irregular lending practices
Mumbai: The Reserve Bank of India (RBI) on Monday said it has cancelled the certificate of registration (CoR) of New Delhi-based Datta Finance and Trading Pvt Ltd due to irregular lending practices.
The CoR has been cancelled by the RBI as the NBFC has violated guidelines on code of conduct in outsourcing of financial services in its digital lending operations, the central bank said in a release.
The company violated the norms by outsourcing its core decision-making functions, such as sourcing of customers, conducting their due diligence, disbursement of loans, servicing of loans, recovery of loans granted as well as KYC verification to the service provider, it said.
KinCash app & DoLoan app (Zest Top One Technology Pvt Ltd) and ZestCash app (the company’s in-house app) are the service providers. Following cancellation of the CoR, the company shall not, hereinafter, transact the business of a non-banking financial institution (NBFI), the RBI said.
