The Reserve Bank of India (RBI) has severely penalized two non-banking finance companies (NBFC). The RBI told them that Kudos Finance and Investments Limited (Kudos Finance and Investments Pvt Ltd) in Pune and Credit Gate Pvt Ltd. in Mumbai had canceled their registrations. This is because both NBFCs engaged in lending practices that violated regulations.
The registration certificate was canceled.
Both NBFCs (NBFCs) are prohibited from conducting business with Non-Banking Financial Institutions following the cancellation of the Certificate of Registration (CoR), according to a statement made by the Reserve Bank (RBI) (NBFIs). As a result, the registration certificate of the NBFC has been revoked, according to the central bank. The registration has been revoked because the work of digital loan operations through third-party apps violated RBI norms on outsourcing and fair dealing practices.
Had done undue harassed to the customers.
Both of the above-mentioned NBFCs, by RBI, were breaking the law regarding increasing interest rates. Additionally, customers were subjected to unfair harassment regarding loan collection. The RBI fined Krazybee Services Pvt Ltd. a total of Rs 42.48 lakh at the beginning of February. In addition, the issue of Crazybee's recovery representative pestering the consumers during debt collection came to the fore.