RBI Cancels Registration Certificates of Two NBFCs Over Irregular Lending Practices

The Reserve Bank of India (RBI) has revoked the registration certificates of two Non-Banking Financial Companies (NBFCs), Star Finserv India and Polytex India, due to irregular lending practices and non-compliance with guidelines on outsourcing financial services and customer data confidentiality.

The Reserve Bank on Monday announced the cancellation of the registration certificates of two NBFCs, Star Finserv India and Polytex India, citing irregular lending practices.

Located in Hyderabad, Star Finserv India operated under 'Progcap' while Mumbai-based Polytex India used the 'Z2P' mobile application for its services.

RBI stated that Star Finserv breached guidelines on outsourcing financial services and data confidentiality, while Polytex outsourced core decision-making functions and charged exorbitant interest rates, violating the Fair Practice Code.

Following the cancellation, both entities are barred from conducting business as non-banking financial institutions, the RBI confirmed.

(With inputs from agencies.)