Reserve Bank of India (RBI) NBFC on Tuesday said it has canceled the license of non-banking financial company (NBFC) X10 Financial Services Ltd due to irregularities in digital loan operations. The Mumbai-based company was providing loans through several service providers (mobile apps) including WeCash Technology, XNP Technology, Yarlung Technology, Xinrui International, Mad-Elephant Network Technology and HudaTech Technology. The Reserve Bank said the Certificate of Registration (CoR) has been canceled as the company violated the guidelines on code of conduct in outsourcing of financial services in its digital lending operations.
The company was outsourcing
The company ‘outsourced’ its core functions such as credit appraisal, interest rate fixing as well as ‘know your customer’ verification to a service provider (SP). Also failed to investigate the service provider. X10 Financial Services Limited was formerly known as Abhishek Securities Limited. The company was issued a certificate of registration in June 2015.
Committee will assess bank license applications
RBI has reconstituted the Standing External Advisory Committee (SEAC) to assess applications for universal (offering all banking services) banks and small finance banks. The chairperson of the five-member committee will be former Deputy Governor of Reserve Bank of India M.K. Jain. As per licensing guidelines, preliminary scrutiny of applications for universal and small finance banks is conducted by RBI to ensure prima facie eligibility of the applicants. The SEAC, composed of eminent individuals with experience in the banking, financial sector and other relevant fields, then evaluates the applications.
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