RBI Cancels Registration of Chinese-Owned Lending App Cashbean
The Reserve Bank of India (RBI) on February 24 cancelled the registration of fintech startup, Cashbean for flouting a slew of norms. The central bank said that it has nullified the CoR of PC Financial Services (PCFS) – the parent company of Cashbean – for ‘supervisory concerns such as gross violations of RBI directions on outsourcing and Know Your Customer norms.’
The Non-Banking Financial Institution (NBFI) is also in the dock for charging exorbitant rates of interest and other charges to its borrowers ‘in an opaque manner.’ The action was also initiated against the NBFI for unauthorised usage of logos of RBI and CBI for recovery from its borrowers.
The decision was taken by RBI under Section 45-IA (6) (iv) of the Reserve Bank of India Act, 1934. Under the rule, RBI has the power to cancel the CoR of any NBFC if it flouts directions issued by RBI or if it fails to maintain accounts in accordance with the requirements of the law.
PCFS is primarily engaged in mobile-based lending operations through its app Cashbean. With the announcement, the Cashbean app will cease to conduct any business in India.
Incorporated in 1995 as an Indian company, PCFS got the NBFC licence in 2002 and received RBI nod in 2018. Afterwards, the ownership of the company was transferred and it became a Chinese controlled company.
