The Reserve Bank of India on Wednesday said it has cancelled Certificate of Registration of five non-banking financial companies for violation of norms related to outsourcing and fair practices code in their digital lending operations.
The NBFCs whose certificate stands cancelled are UMB Securities Ltd., Anashri Finvest Ltd., Chadha Finance Pvt. Ltd., Alexcy Tracon Pvt. Ltd. and Jhuria Financial Services Pvt. Ltd.
"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," the RBI said.
It further said these companies 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.
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