Efforts are underway by payment aggregators in India to lobby for the revision of the newly introduced digital lending guideline.
The guideline recently released by the Reserve Bank of India (RBI) stipulates that henceforth, digital lenders must pay out such funds directly to the customer’s account, thereby eliminating the role of payment aggregators.
Earlier, funds to be disbursed by digital lenders went through the aggregators before being paid to the customers.
As reported by the Economic Times, the payment aggregators resolved to lobby the Reserve Bank of India (RBI) through their lobby group, the Fintech Association for Consumer Empowerment (FACE).
ET’s report quoted two executives of the firms saying “The RBI has completely ignored the role of payment aggregators and all intermediaries, so we want to know under the new framework where we fit in,” said a payment aggregator executive. “We are raising this issue with the RBI— why our role has been eliminated.”
“Under the digital lending framework, all loan disbursals will take place between the bank account of the borrower and entities regulated by the central bank. No passthrough of any loan will be allowed via a third party.
This latest circular has put digital lenders and other payment service providers in a quandary. Fintechs are going back to the drawing board, working out new business models and tweaking existing relationships with banks and non-bank lenders,” ET’s report read.