M Rajeshwar Rao, Deputy Governor, RBI
Underwriting standards and risk pricing of banks and non-banking financial companies (NBFCs) should not be affected while onboarding customers through fintech partners, noted M. Rajeshwar Rao, Deputy Governor of the Reserve Bank of India (RBI). on.
Speaking at the India Investment Summit & Awards organized by Mint on March 30, the Deputy Governor said: “The increased dependence on banks or non-banking financial companies (NBFCs) to identify and onboard borrowers through fintech partners should not mean underwriting standards and incorrect pricing of risks.” The speech was uploaded on the RBI website on Tuesday.
Rao said that RBI as a regulator and regulator is examining the existing models and practices to identify the best ways in which they can be deployed for effective credit delivery without compromising on risk management and prudential credit underwriting standards.
He said that despite the innovation in the financial services space, there is a need to be alert to the possibilities that the new entrants in the space, such as fintech companies, could significantly change the financial services universe.
This change could affect the level of market concentration and competition, creating new challenges.
He further said that RBI, as the regulator of an evolving financial landscape with different types of financial institutions, must remain alert to the new ideas and trends emerging in the markets and try to understand their magnitude to explore their potential to disrupt the economy to be able to estimate. the market and consider interventions when necessary.
First print: April 2, 2024 | 8:20 PM IST