RBI cancels registration of 5 NBFCs due to irregular lending practices

The Reserve Bank on Wednesday said it has cancelled Certificate of Registration (CoR) of five NBFCs for violation of norms related to outsourcing and fair practices code in their digital lending operations.

Non-Banking Financial Companies (NBFCs) whose CoR stands cancelled are: UMB Securities Ltd, Anashri Finvest, Chadha Finance, Alexcy Tracon, and Jhuria Financial Services.

"The CoR of the (five) NBFCs have been cancelled on account of violation of RBI guidelines on outsourcing and Fair Practices Code in their digital lending operations undertaken through third party apps which was considered detrimental to public interest," the RBI said.

It further said these companies were also not complying with the extant regulations pertaining to charging of excessive interest and had resorted to undue harassment of customers for loan recovery purposes.