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The Reserve Bank of India (RBI) has cancelled the Certificate of Registration (CoR) of Polytex India Ltd, a Non-Banking Financial Company (NBFC) based in Mumbai, under the powers conferred by Section 45-IA(6) of the RBI Act, 1934. The company had been operating through the ‘Z2P’ mobile application, owned and operated by Zaitech Technologies Private Limited.
Following the cancellation, Polytex India Ltd is prohibited from conducting any business as a Non-Banking Financial Institution (NBFI) under the RBI Act, 1934.
The cancellation was due to multiple violations of RBI guidelines, including:
Outsourcing of core lending functions: The company outsourced essential operations such as client sourcing, KYC verification, credit appraisal, loan disbursal, recovery, follow-up with borrowers, and complaint resolution to a third-party service provider.
Violation of Fair Practices Code: While the NBFC earned a fixed fee from the service provider, the provider collected interest from borrowers, sometimes at exorbitant rates, contravening RBI’s Fair Practice Code guidelines.
RBI’s action reinforces its commitment to ensuring regulatory compliance, protecting customer interests, and maintaining ethical standards in digital lending operations.
[RBI]