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In an effort to curb illegal digital lending, the Securities and Exchange Commission of Pakistan (SECP) has written to Google and Apple asking them not to allow unlicensed digital lending applications in their respective app stores.
SECP Chairman Akif Saeed said on Friday that he was answering a question that unregistered and unlicensed applications of non-banking service providers should not be listed on the Google Play and Apple Stores. business recorder At a meeting with a group of journalists.
“We have asked both companies not to allow such apps on their platforms. Google has opened an office in Pakistan, which will make it easier for us to communicate with them,” said Saeed. .
Digital Lending Firms: Compliance Certificates Now Mandatory
Last month, Google opened a liaison office in the country and also registered with the SECP. The chairman further said SECP is working with mobile his wallet and digital payment solution providers such as Jazz Cash and He Easypaisa to prevent illegal digital lending.
“SECP has asked Pakistani digital remittance platforms not to facilitate payments to illegal non-banking organizations,” he added.
Last month, the Pakistan Competition Commission (CCP) launched an investigation into app-based ‘nano’ and ‘micro’ personal loan providers. Initial findings indicate that companies were trying to provide services without meeting legal requirements for non-bank microfinance. Corporate (NBMFC).
A Chinese Communist Party official said business recorder Initial investigations revealed that these micro-loan providers charged higher interest rates than advertised and were primarily exploiting low- and middle-income earners.
The CCP has also found instances of false data privacy and security claims from these lenders, and said it believed they were collecting personal data under the pretext of providing loans.
The NBMFC Act provides a framework for regulating nano-loans in amounts above Rs 10,000, but most of these applications offer lower loan amounts.
According to CCP research, these nano-loan-giving applications have been downloaded well over 10 million times by the general public.
Analysts say digital lenders disbursed Rs 33 billion in loans during the last financial year
Last month, the SECP also highlighted growing concerns about unauthorized sales of licensed digital lending firms, breaches of data privacy, and coercive collection practices.
It also issued directives to protect the public interest and ensure fair treatment of borrowers in the digital lending ecosystem.
Through a circular, SECP has issued digital lending standards applicable to NBFCs conducting lending activities through digital channels and mobile applications.
This requirement stipulates minimum mandatory disclosures and provision of a Key Fact Statement (KFS) prior to disbursing a loan to a borrower. These include the approved loan amount, annual rate, term of the loan, dated installment/lump sum amount, and all fees and charges.
According to SECP, to ensure transparency and ease of understanding, digital applications should display KFS overview in both English and Urdu via video/audio, screenshots, email/SMS. I have.
In addition, no fees are charged to the borrower that are not included in KFS. To discourage unlicensed digital lenders, licensed digital lenders are required to disclose their full company name and license status on their lending platform/app and ensure that advertising and publications are fair and contain you have to make sure it’s not. Misleading information according to SECP terms.
To ensure data confidentiality and privacy, digital lenders do not have access to the borrower’s phone book, contact list, or photo gallery, even if the borrower has consented.
Lender shall also not be permitted to contact any person on Borrower’s contact list, except for those specifically authorized by Borrower as guarantor and who provided consent to Digital Lender at the time of loan approval.
Additionally, no data is stored on cloud infrastructure outside Pakistan’s jurisdiction.
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