Fintech Association for Consumer Empowerment (FACE), India’s only Digital Lenders industry body, announced today that they have applied to RBI to take on the role of a Self-Regulatory Organisation (SRO) in the digital lending industry.
FACE member companies cater to more than half of the consumer lending market volumes in India. The organisation has been working closely with regulators, official stakeholders, industry players, and other consumer groups to address the need for proactive consumer empowerment, including financial literacy, consumer protection, and the challenge of working with regulators in dealing with fringe elements that hurt consumer trust in the system.
SROs are non-governmental organisations that set and enforce rules and standards relating to the conduct of entities in their respective segments.
FACE’s application comes on the back of RBI seeking suggestions from industry groups to enforce regulations for digital lending platforms in the country, in an effort to curb illegal lending apps.
According to RBI, an SRO in the industry will be the most suited entity to regulate the ecosystem that will help in establishing good practices among the digital lenders and prevent fraud and exploitation of consumers while ensuring a steady growth of the overall sector.
FACE intends to work with the RBI and all official stakeholders to promote responsible lending, which will uphold ethical lending practices, data security, cyber security, consumer privacy and weed out predatory lenders.
With responsible financial practices, we believe that financial impact can contribute to the growth of our GDP.” said Ram Rastogi, Governance Council Member at FACE and a Digital Payments Strategist and a thought leader in Financial Services, FACE.
FACE members have been a key part of the Fintech lending ecosystem in India for the preceding 4 years and serve a cumulative consumer base of over 90 lakh consumers across 19,000 pin codes in India.
Digital lending has emerged as one of the key sectors which have found tremendous approval amongst the consumers specifically amidst consumers who otherwise do not have access to the traditional forms of credit. However, the lack of a regulatory body has allowed the entry of illegal apps that are exploiting consumers and an SRO is the immediate need of the hour that can resolve this issue in the long term.
