As per an article in today's Economic Times, the RBI has banned the use of direct selling agents (DSAs) to source retail loans and physical verification of documents of borrowers.
RBI believes that the DSAs should play only a limited role, with KYC procedures to be undertaken by banks' officials and not outsourced.
However, DSAs may conduct e-KYC of borrowers or physically carry biometric readers for customer verification.
Awaiting clarity on this, but prima facie, a potential ban on loan sourcing by DSAs would be a negative for the banking sector, and could weigh on retail loan growth outlook in the near term.
Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.
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