RBI working group warns on digital lending by big tech players

The working group has recommended the formation of a nodal agency & SRO for digital lending apps

Big tech players entering the digital lending space could have regulatory implications on concentration and competition risks, a working group of the Reserve Bank of India (RBI) has cautioned.

The RBI should work on a framework for identifying and managing risks arising from big tech as well as decentralised finance through blockchain technology, it has advised.

The report said: “… digital innovations along with the possible entry of BigTech companies may alter the institutional role played by existing financial service providers and regulated entities. A fallout of this may get reflected in blurring of regulated and unregulated financial institutions/ activities.”

Big tech firms