RBI deputy governor urges banks to exercise prudent risk management
Live MintBanks must ensure that their growing reliance on fintech companies does not result in poor underwriting standards and improper pricing of risk, cautioned M Rajeshwar Rao, deputy governor, Reserve Bank of India. {{^adFree}} {{/adFree}} “The increased reliance of banks and non-banking financial companies to identify and onboard customers through fintech partners should not mean lowering underwriting standards and improper pricing of risks," Rao said at the Mint India Investment Summit on Saturday. The deputy governor said that the central bank is actively reviewing existing models to ascertain how fintech collaborations can enhance credit delivery without compromising risk management or prudential underwriting standards. Also, Federal Bank and South Indian Bank were asked to cease issuing co-branded credit cards after it was discovered that the process of customer acquisition via their fintech partners failed to adhere to RBI standards.
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