Payments and API banking solutions company Cashfree Payments has launched a disbursement and collection solution for lending to non-banking financial companies or NBFCs and their partner lending service providers or LSPs to enable them to comply with the new digital lending guidelines. Cashfree payments through its solution will facilitate both digital lending and co-lending use cases.
RBI has stipulated that all fund flows relating to loan disbursement and repayment should be directly between the bank account of the lender and the borrower, without any third party pass-through or pool account. However, this general rule has limited provisions for: (i) co-lending transactions by banks and NBFCs in accordance with the extant regulatory directions issued by RBI; (ii) disbursements specifically covered under a statutory or regulatory order of the Reserve Bank of India or any other regulator; and (iii) disbursements to third parties as per the specific end use of the loans.
Cashfree Payments solution will facilitate creation of lender escrow, direct loan disbursement to borrowers, management of multiple LSP partnerships, efficient resolution, borrower identification and bank account verification. E-NACH also enables repayment through UPI Autopay in compliance with Cashfree Payment Guidelines.
“The digital lending and co-lending segment in India has grown very rapidly due to the high fintech adoption in the country. With exponential growth, there is a strong need to enable compliant and scalable solutions for loan disbursement, loan repayment, KYC verification among other things. We are happy to announce that we are now offering our disbursement and repayment solution, which is compliant with the new digital loan guidelines. As a leader in the API banking and payments space, we have endeavored to provide this solution at a critical juncture to ensure continuity and growth for our merchants by keeping compliance at the center stage,” said Akash Sinha, Co-Founder and The CEO said. Cashfree payments.
Recently, India’s largest lender, SBI invested in cashfree payments underscoring the company’s role in building a strong payments ecosystem. Cashfree Payments works closely with all major banks to build the core payments and banking infrastructure powering the company’s products and is supported by leading platforms such as Shopify, Wix, Paypal, Amazon Pay, Paytm and Google Pay. be integrated together. Apart from India, Cashfree payment products are used in eight other countries including the US, Canada and the United Arab Emirates.
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