The Reserve Bank of India’s (RBI’s) action on two non-banking financial companies (NBFCs) on Thursday could temporarily disrupt disbursements for fintech companies that have been sourcing customers for these firms.
The disruption for fintech companies is expected to be temporary, thanks to their multiple partnerships beyond just NBFCs.
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Notably, the RBI barred DMI Finance and Navi Finserv from sanctioning and disbursing loans due to their practice of charging exorbitant interest rates.
“Since a fintech partners with multiple NBFCs, the regulatory impact on a single entity may be very small for a fintech’s overall business. Thus, fintech firms may not get impacted in the longer term and only some minor disruption would be visible,” an industry executive said, requesting anonymity.