According to Rao, mis-selling has taken a digital form known as ‘dark patterns’. These designed interfaces and tactics are intended to trick users into specific behavior, such as obtaining high cost, short-term consumer credit under the guise of a quick loan.
The Deputy Governor also called upon banks to strengthen security to prevent cyber frauds in the techno-banking environment. “Incidents of fraud and data breaches are on the rise. Consumers today face threats from technology-driven frauds such as fraudulent apps, privacy violations and deepfakes,” Rao said.
![Screenshot 2023-11-24 054713](https://static.toiimg.com/thumb/imgsize-23456,msid-105457614,width-600,resizemode-4/105457614.jpg)
On the proposal to re-look at the liquidity framework, Rao said the RBI’s micro-prudential framework is based on timely provision for anticipated losses due to default and maintaining adequate capital to absorb unexpected losses. “The third component – liquidity – has been much discussed in global forums recently. However, it is still worth reiterating that, in India, we introduced the Statutory Liquidity Ratio (SLR) in 1949, which banks were required to maintain There was a need for a level of high quality liquid assets,” Rao said. Currently SLR The requirement applies only to banks.
“We must work harder, work smarter and work together to maintain and strengthen the trust of customers to protect them from these threats,” Rao said. The deputy governor’s comments come as there has been a sharp rise in small ticket personal loans of less than Rs 50,000 with high interest rates and high default rates.
According to Rao, while next-generation fintech innovations should be appreciated, there is also a need to redefine regulation to ensure financial stability and customer protection. Rao was speaking at the FIBAC 2023 conference jointly organized by FICCI and IBA In Mumbai on Thursday.
Rao drew attention to the fact that the banking crisis in the US and the Credit Suisse incident in March 2023 occurred despite banks having comparable or better levels of capital and liquidity than their peers.
(TagstoTranslate)Business News(T)SLR(T)RBI(T)M Rajeshwar Rao(T)IBA(T)FICCI