ISLAMABAD: The Securities Exchange Commission of Pakistan (SECP) has introduced a new set of rules for online loan apps to curb predatory practices and ensure the financial sustainability of the borrowers.
The Securities Exchange Commission of Pakistan (SECP) imposed stricter rules for the online loan apps by setting maximum limit of loans, loan period, restriction on use of the debtors’ personal data and others.
In order to curb predatory practices and ensure financial sustainability of the borrowers in the digital nano-lending sector, the SECP has imposed exposure limits on digital lenders and borrowers, a press release read.
A maximum limit of Rs25000 has been imposed for individual borrowers from a single loan app, and the aggregate amount of loans from multiple Apps has been restricted to not exceed Rs75,000.
Moreover, the loan period for a nano-loan through personal loan apps has been restricted to not more than 90 days.
The exposure limits on borrowers shall promote responsible lending behaviours and prevent borrowers from being trapped in debt cycles due to multiple loans.
In a bid to ensure cyber security and protect sensitive data of borrowers, condition has also been imposed whereby personal loan apps must obtain a certificate from a PTA-approved Category I Cyber Security Audit Firm (CSAF).
Additionally, prior to the sign-up process, apps will be obligated to display a pop-up alert in accordance with directives from SECP to inform app users about the terms, conditions, and potential ramifications of borrowing. –Agencies
