RBI expands NBFC audit ambit to cover their service providers

The Reserve Bank of India is intensifying scrutiny of NBFCs' partnerships with fintech loan service providers (LSPs). RBI officials are directly engaging with LSPs, focusing on KYC compliance, data handling, and customer communication transparency. The regulator is also evaluating concentration risks arising from over-reliance on a few LSPs, concerned about potential systemic vulnerabilities and cybersecurity threats.