Big tech firms carry risks which need to be assessed: RBI Governor

NEW DELHI: Entry of big tech firms into the financial sector poses systemic risks, RBI Governor Shaktikanta Das said on Friday. Companies including Google, Amazon and Facebook (Meta) pose question marks around competition and data privacy.

“They (big tech) carry risks, which need to be properly assessed and dealt with,” Das said at an event organised by the Financial Express newspaper. Such companies can include entities in e-commerce, search engines and social media platforms that have started to offer financial services in a “big way” on their own or through tie-ups, he said, adding this is leading to the use of new methodologies in credit assessment.

“Such large-scale use of new methodologies in credit assessment can create systemic concerns like overleverage, inadequate credit assessment and similar other risks,” he said. Das said deploying harsh recovery methods such as calling up at odd hours or using foul language is “unacceptable.”

He assured that the RBI is paying “serious attention” to those events and will ensure suitable action is taken to curb them. He said most such instances are reported from unregulated entities, but added that the central bank has also come across such tactics being used by entities regulated by the RBI, and urged all players to give special attention to the same. The comments came at a time when there have been allegations of suicides by many borrowers triggered by harsh recovery practices by agents.