Feb 22, 2018 | Source: uniindia.com

FPSB India & IIM Lucknow unveil report on responsible lending practices

New Delhi, Feb 22 (UNI) The Financial Planning Standards Board India (FPSB) and Indian Institute of Management, Lucknow have released a report “Navigator of Responsible Lending- India”, a statement said on Thursday.

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

“The first edition of this report 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,” it added.

The report stated that in the personal loan category, Axis Bank, Fullerton Credit India, Home Credit India, Standard Chartered Bank excel in following a higher degree of responsible lending practices than peers through the “loan application process” whereas only Standard Chartered Bank and Tata Capital stand out for the “financial inclusion” parameter. Almost all the evaluated industry players performed well in the parameters of “Fee and Charges’ and `Loan Servicing’.

Ranjeet Mudholkar, Vice-Chairman and Chief Executive Officer, FPSB India said, “Within the context of lending and borrowing, both the parties have mutual responsibility towards each other, to fulfil their respective obligations, with overall objective of making seamless experience for all. The aim of the study is to establish a framework of responsible and healthy relationship, which could result in secured and pleasant experience mutually.”
Speaking on the key outcomes of the research, Prof. Devashish Das Gupta (PhD), Associate Professor of Marketing Management, Indian Institute of Management, Lucknow who led the study 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,” Mr Gupta added.
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