RBI governor said big loss due to entry of tech companies in financial market

Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the entry of large technology companies into the financial business can lead to systemic concerns like excessive borrowing and non-payment of debt at the borrower level. With big technology companies like Google, Amazon and Facebook (meta) getting into the financial business, questions will arise about competition and data privacy.

"There are risks associated with big tech companies, which need to be properly assessed and tackled," Das said at an event. He said such companies include e-commerce companies, search engines and social media platforms, which have started offering financial services on their own or through partnerships "on a large scale" and thus have the potential for debt assessment. New methods are starting to be used.

Das said the use of coercive methods, including calling, calling in abusive language, by the debt recovery agents, is not acceptable and RBI is taking serious note of such incidents so that necessary action is taken to check them.

He said that most such incidents are related to unregulated establishments. However, the central bank has come to know that the institutions regulated by it also do the same. He asked all the institutions of the region to pay special attention to this issue. The RBI governor's comments assume significance in the sense that there have been recent reports and allegations that several borrowers have committed suicide due to the harsh practices of agents. He said that the RBI will soon come out with a consultation paper on providing digital loans.