Cashfree Payments launches lending solution for NBFCs and LSPs

The RBI has prescribed that all fund-flows relating to loan disbursement and repayment must be directly between the bank account of the lender and borrower, without any pass-through or pool account of any third party. However, there are limited carve-outs to this general rule for: (i) co-lending transactions entered into by banks and NBFCs in accordance with the existing regulatory instructions issued by the RBI; (ii) disbursements covered exclusively under the statutory or regulatory mandate of the RBI or any other regulator; and (iii) disbursements to third parties pursuant to specific end-uses of the loans.

Cashfree Payments’ solution will facilitate creation of lender escrows, seamless loan disbursements direct to borrowers, managing multiple LSP partnerships, efficient reconciliation, borrower identity and bank account verification. Cashfree Payments also enables repayments through e-NACH, UPI AutoPay in compliance with the guidelines.

“The digital lending and co-lending segments in India have grown very rapidly driven by the high fintech adoption in the country. With the exponential growth, there is a strong need to enable compliant and scalable solutions for loan disbursals, loan repayment, KYC verification among other things. We are delighted to announce that we are now offering our disbursal and repayment solutions, compliant to the new Digital Lending Guidelines. As a front-runner in the API Banking & Payments space, we have strived to provide this solution at a critical juncture to ensure continuity and growth for our merchants while keeping compliance at center stage,” said Akash Sinha, co-founder and CEO of Cashfree Payments.

Recently, India’s largest lender, SBI invested in Cashfree Payments underscoring the company’s role in building a robust payments ecosystem. Cashfree Payments works closely with all leading banks to build the core payments and banking infrastructure that powers the company’s products and is also integrated with major platforms such as Shopify, Wix, Paypal, Amazon Pay, Paytm and Google Pay. Apart from India, Cashfree Payments products are used in eight other countries including the USA, Canada and UAE.