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ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has stopped the Non-Banking Finance Companies (NBFCs) from providing any type of integration services or collaboration with unapproved digital lending apps/platforms.

In this regard, the SECP has issued a circular number 3 of 2023 on Monday barring the NBFCs from collaborating with unauthorised and unapproved apps/platforms for digital lending purposes.

The SECP has also warned the NBFCs that they may face penalty up to Rs 50 million or cancellation of licences in case of non-compliance.

Digital lending companies: SECP working with Google, Apple to remove unauthorised apps

According to the SECP, the Commission has noted a recent trend whereby a number of unauthorised apps/online platforms have been engaged in digital lending posing themselves as Non-Banking Finance Companies (NBFCs). Furthermore, such unauthorised apps/online platform providers are also approaching different licenced NBFCs for collaboration to offer their unauthorised and unapproved apps/platforms for digital lending purposes.

The Commission has serious concerns on the use of licenced NBFCs by such unauthorised/unlicenced platforms and apps. The Commission, therefore, in exercise of the powers conferred under sub-section (3) of section 282B of the Companies Ordinance, 1984, hereby directs all NBFCs to abstain from engaging in any kind of app integration, app sub-letting, licence sub-letting, payment services, credit scoring and credit worthiness check, and/or any other type of integration services or collaboration with any digital lending app that is not approved by the SECP in terms of Circular 15 of 2022 dated December 27, 2022.

The NBFCs are also required to take necessary measures to create awareness among their customers about inherent risks and illegality of such unauthorised lending apps.

This Circular shall come into force immediately and any non-compliance shall attract the penal provisions of section “282J” of the Companies Ordinance, 1984, the SECP added.

Copyright Business Recorder, 2023

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