Categories: Banking

CoR issued to P C Financial Services has cancelled by RBI

On 24th of February 2022, the Reserve Bank of India (RBI) announced that it had cancelled the certificate of registration which was issued to PC Financial that uses an app called Cashbean to carry out the lending operations. This is the first time a regulatory action has been taken against an organisation in response to a surge in complaints about multiple digital lenders’ usurious and unjust recovery tactics.

Buy Prime Test Series for all Banking, SSC, Insurance & other exams

“The Certificate of Registration (CoR) issued to M/s P C Financial Services Private Limited, New Delhi, by the Reserve Bank of India has cancelled in exercise of the powers conferred under Section 45-IA (6) (iv) of the Reserve Bank of India Act, 1934.” According to a statement from the central bank as a consequence, M/s P C Financial Services Private Limited “must not transact the business of a Non-Banking Financial Institution (NBFI), as specified in clause (a) of Section 45-I of the RBI Act, 1934.

The company’s certificate of registration (CoR) has been revoked due to supervisory concerns, including egregious violations of RBI outsourcing directives and Know Your Customer (KYC) standards, according to the RBI. The company was also found to be charging usurious interest rates and other fees to its borrowers in an obfuscated manner, as well as using the RBI and the Central Bureau of Investigation (CBI) logos for recovery from borrowers in violation of the Fair Practices Code.

BACKGROUND:

The Directorate of Enforcement (ED) seized bank/payment gateway funds worth Rs 288 crore from PC Financial Services through three seizure orders issued under the Foreign Exchange Management Act, 1999 (FEMA).

In 2020, the RBI formed a working group to present a report on the regulation of digital lending applications, following a public outcry over the excesses perpetrated by such apps. The group’s suggestions, which were issued in November 2021, range from requiring digital lending apps (DLAs) to go through a nodal agency verification process to enacting separate legislation to combat unlawful digital lending activities.

Key Takeaways:

  • The Certificate of Registration (CoR) issued to M/s P C Financial Services Private Limited, New Delhi, by the Reserve Bank of India has cancelled.
  • The company’s CoR has been revoked due to supervisory concerns, including egregious violations of RBI outsourcing directives and KYC standards, according to the RBI.

Find More Banking News Here

Madhavi Gaur

Recent Posts

National Mathematics Day 2024: Celebrating Srinivasa Ramanujan

Every year on December 22, India celebrates National Mathematics Day. This date marks the birth…

20 hours ago

Current Affairs Flash 22nd December Based Quiz

In competitive exams like SSC, Defence, State Exams, and Railways, current affairs are crucial. This…

1 day ago

Ukraine Strikes Russian High-Rises in Kazan: 9/11-like Attack

On Saturday, December 21, 2024, several explosive-laden drones, believed to be part of Ukraine's ongoing…

2 days ago

Which District of Uttar Pradesh is Known as the Moonj City?

Uttar Pradesh, one of India's most populous states, is known for its rich cultural and…

2 days ago

55th GST Council Meeting: Key Highlights and Proposals

The 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, convened ministers from 28…

2 days ago

24th BIMSTEC Senior Officials Meeting (SOM)

India participated in the 24th BIMSTEC Senior Officials Meeting (SOM), hosted virtually by Thailand on…

2 days ago