The Reserve Bank of India on Monday said it has cancelled the certificate of registration of Nagpur-based Zavron Finance due to irregular lending practices.
Zavron Finance has violated RBI guidelines on code of conduct in outsourcing of financial services in its digital lending operations by outsourcing its core decision-making functions such as credit appraisal, loan disbursal, fixing of rate of interest, as well as KYC verification process, the central bank said in a statement.
It further said the company not only failed to conduct due diligence on the Lending Service Providers (LSPs) to assess their competence, security and internal controls, ultimate beneficial owners, nationality/shareholding pattern, but also failed to carry out periodic review of security practices/control processes deployed by the LSPs so as to secure confidentiality/security of customer data.
"The company has violated RBI guidelines on fair practices code by not providing the copy of loan agreement and sanction letter in vernacular language to its customers," the RBI said.
Following cancellation of the certificate of registration, Zavron Finance cannot transact the business of a non-banking financial institution (NBFI).
Binenace Information Technology, Microcard India Technology Consulting Service, Truthigh Fintech, Jcflash Technologies (FlashCash), Cash Bull Financial Technology, Onion Credit (Cash Mama), Crazyrupee and Zincash, are some of the services provider/mobile app names associated with the company.
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