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2022 in retrospect: Regulatory activity in the financial sector

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– Vinod Kothari | finserv@vinodkothari.com

It has been a brisk year in terms of activity – a busy regulator kept  all regulated entities busier. This year marked the initiation of a new SBR framework for NBFCs – hence there was a lot of buzz in terms of understanding the new regulatory framework. The names of 16 Upper layer entities were declared by the RBI – consisting of 5 HFCs, 10 NBFC-ICCs, one CIC[1]. As is the design, UL entities are treated at par with banks in terms of regulatory intensity –hence, there is a LEF (large exposure framework), differential provisioning norms in case of  standard assets, CET-1 capital requirement, mandatory listing etc.

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Reintroduction of the Data Protection Bill: Analysing the Implications for FinTech

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– Financial Services Division (finserv@vinodkothari.com)

Background

The Ministry of Electronics and Information Technology (MeitY) introduced the revised draft of the Digital Personal Data Protection Bill, 2022[1] (‘Bill’) on November 18, 2022 for public comments. The Bill is intended to be technology and sector-agnostic and hence, shall serve as a broad guide for digital data protection across all sectors. It is expected that sector-specific regulators shall develop regulations based on the legislation passed based on the said Bill.

In this write-up, we intend to cover the broad prescriptions of the said draft Bill and their impact on the fintech industry.

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Workshop on Emerging Regulatory Framework for NBFCs and digital lending

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Register here: https://forms.gle/D7QTKbPDcZn3AP7y6
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Debugging the Digital Lending Domain

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RBI Working Group Report brings major recommendations to the digital lending regulatory framework

Team Finserv | finserv@vinodkothari.com

Introduction

Digital lending does not have a major share yet in the overall financial sector, the graph of the digital lending growth will only move upwards.[1] Time and again RBI has been cautioning the public with respect to unauthorised DLPs/ DLAs.

Digital Lending Platform (‘DLP’) (web) / Digital Lending Apps (application) (‘DLA’) are  web or mobile based applications with user interface that facilitate borrowing by a financial consumer from a digital lender.   The scenario of these lending platforms is somewhat like this – a prospective borrower goes to an app/ platform, fills up some information. At the background, the DLP/ DLA collects and collates the information, including credit scores of the individual. Finally, the loan is sanctioned in a jiffy, mostly within minutes. Read more →