All is not well with India’s BNPL frenzy

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Editor's note: Around 10 officials from the Reserve Bank of India, seated around a boardroom table at the central bank’s Mumbai headquarters, looked on intently as the founder of a five-year old startup made his presentation.  His firm is a licensed non-banking financial company, or NBFC in Indian banking parlance, with a modest loan book of about Rs 200 crore. More importantly, it’s also a fintech startup with a buy-now-pay-later app that has disbursed loans worth Rs 2,000 crore over the past six months, in partnership with a number of other NBFCs. And the reason this founder had been summoned by the central bankers was to show them just how his app works. “We were invited to give a presentation on a two-day notice… I don’t want to share the exact date, but it was sometime in early December,” says the founder. This was an interesting time for digital lending in India, particularly so for companies using the buy-now-pay-later, or BNPL, model. Just in November, the RBI’s working group on digital lending had pegged the amount of loans disbursed purely online at …