Razorpay launches new lending solution for fintechs, NBFCs under RBI's guidelines
The new solution will automate direct disbursals and repayments between the borrower’s and the regulated entity’s accounts, in adherence to new digital lending guidelines issued by RBI.
The business banking platform of, RazorpayX, has launched a digital lending solution for NBFCs and fintechs—Digital Lending 2.0—in adherence to the new digital lending guidelines issued by the Reserve Bank of India (RBI).
Until now, NBFCs transferred the money into third-party pool accounts or fintech accounts from where the funds were further disbursed by fintechs to their borrowers. However, following the latest guidelines, transferring money via a pass-through account/pool account of any third-party/fintechs is no longer compliant.
As per the company, the new solution will help in automating direct disbursals and repayments between the borrower’s and the regulated entity’s account, making NBFCs and fintechs work together efficiently.
It further informed that the full-stack lending suite would enable lenders to automate direct money transfers between the lender’s and borrower’s account, and manage multiple fintech partners using a single current account besides auto-reconcile millions of transactions with their transaction status.
“With RBI’s deadline making it mandatory for businesses to move to newer and compliant processes by November 30, 2022, it was essential for us to take into account the needs of our customers and come up with a solution that can help them transition into the future of digital lending with utmost ease and confidence,” Rahul Kothari, Chief Business Officer, Razorpay said.
The new digital lending guidelines announced by the central bank has made it mandatory for disbursals and repayments to take place directly between the accounts of regulated lenders (NBFCs or banks) and borrowers. This forced lending merchants rethink their payment infrastructure and figure out a new way to transfer money to their borrowers without any pass-through account/pool account of any third-party/fintechs.
The company said its has already onboarded few players, including Kisetsu Saison Finance India and MoneyTap.
RazorpayX currently serves over 30,000 businesses and claims to process transactions for over 20% of all UPI-registered users in India. The firm’s payouts platform has seen over 200% growth, disbursing payouts with an annualised money movement of over $30 billion.
Edited by Kanishk Singh