The Securities and Exchange Commission of Pakistan (SECP) will impose penalties on the Non-Banking Finance Companies (NBFCs) that provide integration services or collaborate with unapproved digital lending apps/platforms.
The SECP issued circular number 3 of 2023 on Monday to issue a warning to the NBFCs. The SECP has also warned the NBFCs that they may face a penalty of up to Rs. 50 million or cancellation of licenses in case of non-compliance.
According to the SECP, the Commission has noted a recent trend whereby a number of unauthorized apps/online platforms have been engaged in digital lending posing themselves as Non-Banking Finance Companies (NBFCs).
Furthermore, such unauthorized apps/online platform providers are also approaching different licensed NBFCs for collaboration to offer their unauthorized and unapproved apps/platforms for digital lending purposes.
The Commission has serious concerns about the use of licensed NBFCs by such unauthorized/unlicensed platforms and apps.
The Commission, therefore, in the exercise of the powers conferred under sub-section (3) of section 282B of the Companies Ordinance, 1984, has directed all NBFCs to abstain from engaging in any kind of app integration, app sub-letting, license 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 the inherent risks and illegality of such unauthorized lending apps.
This Circular will come into force immediately and any non-compliance shall attract the penal provisions of section 282J of the Companies Ordinance, 1984, SECP added.
GIPHY App Key not set. Please check settings