Economic Fraud
RBI Cancels NBFC License for Violating Loan Disbursal Protocol via Fintech Apps
The Reserve Bank of India (RBI) announced on Tuesday that it has revoked the registration of non-banking financial company (NBFC) X10 Financial Services Ltd due to irregularities in its digital lending operations. This action is part of RBI’s ongoing efforts to enforce compliance and address violations by banks and NBFCs.
X10 Financial Services Ltd, based in Mumbai, was engaged in providing loans through multiple service providers (mobile apps), including WeCash Technology, XNP Technology, Yarlung Technology, Shinerui International, Mad-Elephant Network Technology, and HuidaTech Technology.
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According to the RBI, the Certificate of Registration (CoR) was cancelled because the company violated the Code of Conduct guidelines for outsourcing financial services in its digital lending operations. The NBFC outsourced critical functions such as credit evaluation, interest rate determination, and Know Your Customer (KYC) verification to service providers, failing to maintain oversight and due diligence of these third-party entities.
X10 Financial Services Ltd, previously known as Abhishek Securities Ltd, was granted its Certificate of Registration in June 2015. However, its failure to adhere to regulatory guidelines and ensure accountability in its operations led to the revocation of its license.
This decision underscores the RBI’s commitment to ensuring that financial entities adhere to ethical practices, particularly in the rapidly evolving digital lending space.
