The RBI on Monday said it has cancelled the certificate of registration of Nagpur-based Zavron Finance due to irregular lending practices.
Zavron Finance has violated RBI guidelines on code of conduct in outsourcing of financial services in its digital lending operations by outsourcing its core decision-making functions such as credit appraisal, loan disbursal, fixing of rate of interest, as well as KYC verification process, the central bank said in a statement.
It further said the company not only failed to conduct due diligence on the Lending Service Providers (LSPs) to assess their competence, security and internal controls, ultimate beneficial owners, nationality/shareholding pattern, but also failed to carry out periodic review of security practices/control processes deployed by the LSPs so as to secure confidentiality/security of customer data.