Responsible lending called for

Hyderabad: Financial Planning Standards Board India (FPSB) and Indian Institute of Management, Lucknow have released the “Navigator of Responsible Lending- India”(NRLI) – a first of its kind report on the state of Indian consumer lending sector with respect to responsible lending practices. 

Focusing on small ticket (up to Rs 15,000) personal and consumer durable loans across both banks and NBFCs, the first-of-its-kind research aims to introduce the Indian consumers especially first time borrowers to the concept of responsible lending practices.

Conducted from July 2017- December 2017, it evaluates the performance of industry along five selected parameters of loan application process, lender’s public information, fees & charges, loan servicing and financial inclusion on the basis of information that a consumer would be able to access in public domain, through his loan journey.

The first edition of the NRLI seeks to set the standards of responsible lending in India, identifying the key parameters and creating an industry-wide institutional matrix and tool for self-regulation that will serve as the defining contours for responsible lending. 

Prof Devashish Das Gupta (PhD), Associate Professor of Marketing Management, IIM- Lucknow  said, “The consumer lending industry in India is growing at a remarkable pace, with banks and NBFCs offering “easy” finance options for consumers to buy anything from a mobile phone to a car within minutes. 

While this is a sign of a progressive and growing economy, we wanted to look at the phenomenon through the prism of globally accepted practices of responsible lending, in light of the customer’s best interest and positive borrowing experience. Responsible lending is about transparent processes, ensuring affordability, transparency of terms and conditions and supporting a borrower to repay loans comfortably. 

Through this study, our aim has been to explore, evaluate and educate the sector and “Navigate” them towards these best practices. We hope to make this report a regular study and look forward to better industry participation in the future.” For details had from www.responsiblelending.in