May 29, 2024 05:36 (IST)
Follow us:
facebook-white sharing button
twitter-white sharing button
instagram-white sharing button
youtube-white sharing button
Rajkot fire: Gaming zone co-owner among those killed, police confirms today | Eyeing more seats in Bengal, PM Modi holds mega roadshow in north Kolkata | 'I am not against minorities but won't divide the country based on religion': PM Modi | Delhi LG VK Saxena takes swipe at Kejriwal over children's hospital fire, orders anti-corruption probe | Punjab minister Balkar Singh's obscene video surfaces, BJP calls AAP 'Anti Aurat Party'
Top banks ask fintech partners to limit small ticket loans
Fintech loans
Photo Courtesy: Pixabay

Top banks ask fintech partners to limit small ticket loans

| @indiablooms | 08 Dec 2023, 01:01 am

Mumbai: Leading banks and non-banking financial institutions in India have reportedly asked their fintech partners to limit the issuance of small personal loans, as disclosed by three banking sources and one industry insider on Thursday, Reuters reported.

This development comes in the aftermath of the central bank's recent tightening of regulations on the rapidly expanding small loan sector.

Paytm has declared its intention to slow down the provision of loans below 50,000 rupees (approximately $600), making it the first entity to make such an announcement since the Reserve Bank of India (RBI) instructed banks last month to increase their capital reserves.

This directive aimed to address concerns regarding the heightened risk resulting from the rising demand for personal loans and lending through non-banking financial companies (NBFCs).

"There is a clear signal from the RBI to pull back, so we will," said a top banker at a mid-sized private sector bank that lends to about a dozen fintechs, according to the Reuters report.

"We have signalled to our fintech partners that we don't want to be present in the less-than-50,000-rupees loan category."

Despite the pullback in small personal loans, there is no intention to sever ties with fintech partners, the report said.

A source from a private sector bank told Reuters, "While we don't plan to completely reduce funding to fintech partners, we have expressed discomfort with their emphasis on small-ticket personal loans."

The impact of this pullback will affect the availability of small-ticket personal loans, not only for Paytm but also for several smaller fintechs with tie-ups with banks and non-bank finance companies (NBFCs).

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.

Support objective journalism for a small contribution.