Reserve Bank of India: RBI keeps taking strict measures against banks and NBFCs for not following the rules. Penalties were imposed on many banks in the past few days. In this sequence, the Reserve Bank has now cancelled the license of an NBFC.
X10 Financial Services: The Reserve Bank of India (RBI) has taken major action against NBFCs due to irregularities in digital loan operations. RBI has canceled the registration of X10 Financial Services Ltd. This Mumbai-based company was giving loans through several service providers (mobile apps). Even before this, RBI has been taking action to cancel licenses apart from imposing penalties on banks and NBFCs.
Loans were given through these service providers
These service providers include Wecash Technology, XNP Technology, Yarlung Technology, Xinrui International, Omelette Technology, Mad-Elephant Network Technology and Huidatech Technology.
Did not follow the prescribed guidelines
The Reserve Bank said that the Certificate of Registration (CoR) has been cancelled as the company has not followed the guidelines on code of conduct in outsourcing of financial services in its digital loan operations. The company ‘outsourced’ its core functions such as credit appraisal, fixing of rate of interest as well as ‘Know Your Customer’ verification to the service provider (SP).
Also, it failed to investigate the service provider. X10 Financial Services Limited was earlier known as Abhishek Securities Limited. The company was issued a registration certificate in June 2015. After cancelling the registration, the central bank said that the company cannot do the business of NBFC.
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