RBI cancels registration of 2 NBFCs

The Reserve Bank said it has cancelled the certificates of registration of two NBFCs — Star Finserv India and Polytex India — due to irregular lending practices.

Hyderabad-based Star Finserv India was offering the service under ‘Progcap’ (owned and operated by Desiderata Impact Ventures Private Limited).

Polytex India, headquartered in Mumbai, was providing services under the ‘Z2P’ mobile application (owned and operated by Zaitech Technologies Private Limited).

Giving reasons for cancelling the Certificate of Registration (CoR) of Star Finserv, RBI said the company has violated guidelines on the code of conduct in outsourcing financial services in its digital lending operations by outsourcing its core decision-making functions, such as credit appraisal, loan sanctioning as well as KYC verification process to the service provider.