RBI Shuts Down X10 Financial Services Over Digital Lending Irregularities

The Reserve Bank of India has revoked the registration of X10 Financial Services Ltd for irregularities in digital lending. The company outsourced key financial operations to various service providers, violating RBI guidelines. Consequently, the company can no longer operate as a non-banking financial company.

The Reserve Bank of India (RBI) announced the cancellation of X10 Financial Services Ltd's registration on Tuesday. This Mumbai-based non-banking financial company (NBFC) faced scrutiny over its digital lending operations.

X10 Financial was distributing loans through multiple mobile app service providers, including Wecash Technology and several others. However, RBI found that the company breached critical guidelines.

Violations included outsourcing core decision-making functions to third-party service providers. These tasks ranged from credit appraisal and interest rate settings to Know Your Customer (KYC) verifications. Consequently, RBI has prohibited X10 Financial from conducting NBFC business.

(With inputs from agencies.)