RBI Cancels NBFC Licence of Datta Finance and Trading

In a major regulatory move, the Reserve Bank of India (RBI) has cancelled the Certificate of Registration (CoR) of Datta Finance and Trading Pvt Ltd, a New Delhi-based Non-Banking Financial Company (NBFC), due to violations in its digital lending operations. This action, announced on September 22, 2025, highlights RBI’s growing focus on ensuring ethical conduct and regulatory compliance in the fast-growing digital lending ecosystem.

Why Was the Licence Cancelled?

According to the RBI’s official statement, Datta Finance violated the guidelines on the code of conduct in outsourcing financial services, particularly in digital lending. The central bank noted the NBFC’s improper delegation of core functions to third-party service providers, which included,

• Customer sourcing
• Due diligence and KYC verification
• Loan disbursal and servicing
• Loan recovery processes

These are critical operational responsibilities, and outsourcing them entirely violates RBI’s Fair Practices Code and Digital Lending Guidelines.

Digital Lending Apps Under the Lens

The NBFC’s questionable digital lending operations were conducted through the following mobile applications,

• KinCash app
• DoLoan app (both operated by Zest Top One Technology Pvt Ltd)
• ZestCash app, an in-house platform of Datta Finance

These apps acted as front-end loan service providers, while decision-making and control remained loosely governed—raising serious consumer protection and data security concerns.

RBI’s Stand on Outsourcing in Digital Lending

RBI has made it clear that NBFCs cannot outsource core decision-making processes in lending. While service providers may assist with technology or user interface, the NBFC must,

• Maintain ownership of customer interactions
• Exercise oversight and control
• Ensure transparent and ethical practices

This cancellation sends a strong signal to fintechs and NBFCs operating via digital platforms that regulatory non-compliance will lead to strict consequences, including revocation of licences.

Implications for Datta Finance and Users

Following the cancellation of its registration, Datta Finance is no longer permitted to operate as a non-banking financial institution (NBFI). This means,

• It cannot offer, disburse, or recover loans
• All existing business operations must be wound up or transferred
• Users of KinCash, DoLoan, and ZestCash may face disruption in service or uncertainty regarding repayments

Borrowers are advised to seek clarification from the RBI or legal assistance in case of disputes or coercive recovery tactics.