The Reserve Bank of India (RBI) has revoked the certificate of registration of Nagpur-based Zavron Finance, citing serious irregularities in its digital lending operations. The central bank announced on Monday that Zavron Finance had violated multiple guidelines, including outsourcing core financial functions to external entities, compromising fair practices, and failing to safeguard customer data.
In a detailed statement, the RBI outlined several violations by Zavron Finance, including outsourcing critical decision-making processes such as credit appraisal, loan disbursal, rate of interest determination, and KYC (Know Your Customer) verification. The company did not conduct due diligence on its Lending Service Providers (LSPs) to ensure their competence, security protocols, or internal controls. Furthermore, Zavron Finance failed to regularly review the security measures and control processes employed by these LSPs, risking the confidentiality and safety of customer information.
The RBI also flagged the company for breaching fair practices code by neglecting to provide customers with loan agreements and sanction letters in vernacular languages, a requirement aimed at ensuring transparency and consumer protection.
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As a result of the cancellation, Zavron Finance is no longer permitted to operate as a Non-Banking Financial Institution (NBFI). Several digital lending platforms associated with the company, including Binenace Information Technology, Microcard India Technology Consulting Service, Truthigh Fintech, Jcflash Technologies (FlashCash), Cash Bull Financial Technology, Onion Credit (Cash Mama), Crazyrupee, and Zincash, are also under scrutiny.
This decisive action underscores the RBI’s commitment to ensuring ethical practices in the financial sector and protecting consumers from malpractices in the burgeoning digital lending space.
