How lenders like Navi resort to extreme borrower surveillance to keep their A game on

Nov 20, 2024

Discover how non-banking financial companies are ramping up borrower surveillance tactics to ensure timely loan repayments. Explore Navi’s aggressive data collection methods, demanding daily access to borrowers' bank statements. Delve into the ethical concerns surrounding such practices and the challenges regulators face. The podcast also touches on the competitive grocery delivery market, highlighting how companies like DMART are adapting to the rise of quick commerce while balancing profitability with growth.

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Intro

00:00 • 2min

Navi's Borrower Surveillance Tactics

02:24 • 5min

Navigating Borrower Surveillance and Data Access in Lending

07:47 • 3min

Navigating Competition in the Grocery Delivery Space

10:37 • 4min

Shifting Dynamics in Retail and E-Commerce Profitability

14:46 • 2min

If you’ve ever taken a loan from a non bank or an NBFC, the EMI is usually auto-debited from your account every month. But if you missed a payment, you know what usually goes down. You are inundated with phone calls from your lender and maybe agents even start visiting your home. Not an ideal situation for you or your lender.

But now, your lender can just monitor your account and deduct the money as soon as it comes into your account…all thanks to that auto-debit permission you granted. Earlier, only a bank could do this when it lent money to its account holder. But now non-banks can do it, too. A fintech executive told The Ken that this tool will soon become business as usual in every lender’s tool box. But things are still not there yet since the banks are not predictably sharing the statement data or their servers are down.

And here’s where account aggregators come into the picture. These aggregators are a newly-created class of licensed companies by the Reserve Bank of India. They basically help businesses exchange financial information about a user after taking the user’s consent.

Meanwhile, Navi Finserv, a four-year-old non-bank, was quite particular about how fast it could help its users take out a loan. Navi’s co-founder and CEO Sachin Bansal—who previously co-founded the Flipkart —believes “banking should be as easy as going on Swiggy and ordering food”. So to amp up both disbursals and collections, Navi and others like it are counting on account aggregators. But being able to access a borrower’s bank statement at any given time is a powerful collection tool.

And the problem is how Navi has been using this power.

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