MONEY9: Startups (START UPS)No, the bad days don’t seem to be coming to an end. Until recently, Adtech companies were facing a number of layoffs, funding cuts and business shutdowns. (FINTECH) Electricity has fallen on companies. The Reserve Bank has stopped Fintech from giving credit lines for prepaid cards and wallets, or so to speak, loans. On June 20, the RBI issued a notification in this regard and it seems that Fintech has stopped breathing.
- The entire business of dozens of fintech startups, including LegePay, Jupiter, Fi, Uni, EarlySalary, relies on this type of credit sharing. Now that the executive model is in jeopardy, their very existence is in question. The shutters of lay-offs and these startups can also start falling when there is no revenue.
- The government also has the full support of the Reserve Bank. But the question is why the need to whip up Fintech suddenly arose.
- There are some big reasons behind this. In fact, banks have expressed concern to the RBI that they are not following the fintech rules in granting loans.
- The Reserve Bank is also facing the risk of money laundering. It is also possible that the fintech is not disclosing the loan being offered by them. That is why the loan is being underreported.
- There are also rumors that many important rules like KYC are being violated. The way in which the business of these fintech companies has grown in recent times. It also raises the fear that the firm is in the business of landing without a safeguard. This needs to be controlled before any big questions arise in the future.
On what terms are these companies giving loans? What are its rules and regulations? Nothing is decided.
There is another reason why the RBI is tightening its grip on fintech companies. And that’s the arbitrariness of instant loan apps. Despite all efforts, complaints continue to come against them. Incidents of misbehavior with people, harassment despite paying off loans are not taking the name of stopping.
Fintech companies are now lax after the RBI’s tightening. And it has started making requests to the government and the Reserve Bank.
Now the question is, what is the way forward? So the possibility is that the Reserve Bank may come up with a comprehensive regulation for this sector after discussions with all stakeholders. But until then these fintech startups have to be prepared to go through a difficult time.
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