RBI cancels registration of two entities for regulatory lapses

The Reserve Bank of India (RBI) on Monday said it has cancelled registration of Pune-based Kudos Finance and Investments and Mumbai-based Credit Gate for regulatory lapses in lending practices.

With cancelled Certificate of Registration (CoR), the two NBFCs should not transact the business of a Non-Banking Financial Institution (NBFI), the RBI said in a statement.

"The CoR of the ... 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," it said.

According to the statement, the entities 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.

Prior to this, the Reserve Bank of India (RBI) has asked online payment gateway PayU India to reapply for its initial payment aggregator (PA) licence.

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The RBI has asked PayU India to reapply for the licence within three months of receiving the central bank’s response to its initial application.

In December, the RBI asked several payment gateway firms, including Razorpay, which had received the regulator’s in-principle nod for a PA licence–to stop onboarding new merchants. The regulator had also with-held Paytm's application to provide payment aggregator service for online merchants.