The Securities and Exchange Commission of Pakistan (SECP) lectured non-banking financing firms (NBFCs) on the improved regulatory standards imposed through Circular No. 15 to address complaints of mis-selling, inflated fees, and unauthorised access to client data. Senior executives from all licenced NBFCs engaged in digital lending attended the online session.
Khalida Habib, executive director of the SECP, told the participants, in a summary of the circular’s essential conditions, that the SECP has set limits on deducting upfront fees from the loan amount. In addition, the loan organisations were prohibited from operating multiple digital apps on Google Play or any other platform. However, they are able to introduce distinct goods and schemes under a single Master App.
Companies that currently operate many applications have been requested to select one Master App and shut down the others within 90 days. The enterprises must also protect the confidentiality of user data and produce audit reports of their apps from an IT security auditing firm recognised by the PTA. On their mobile applications, digital lenders are also obligated to disclose their complete corporate name.
Ahmad Abdul Moiz Khawaja, Additional Joint Director of SECP, informed the participants on regulations pertaining to explicit disclosures of loan terms and conditions, requirements of controlling credit risk, advertisements, grievance redress systems, and loan collection procedures. He explained that NBFCs cannot alter the conditions of the loan arrangement without the borrower’s prior consent.
The SECP has issued a licence for digital lending to M/s Sarmaya Microfinance (Pvt.) Limited, M/s Cashew Financial Services Limited, M/s Credit Fix Financial Services Limited, M/s Qisstpay BNPL Private Limited, M/s Seedcred Financial Services Limited, M/s Finja Lending Services Limited, M/s Tez Financial Services Limited, M/s Abhi Private LTD, M/s Mirco Cred Financial Services Ltd.