Dynamics of NBFC Collaboration
NBFCs and banks continue to strive to meet the financial needs of individuals and
businesses. But with rising financial costs, NBFCs are more focused on providing customized products to
meet specific needs. Unlike banks, which are also under the authority of the RBI, there are differences
that set the
NBFC apart from the banks and are listed below:
- Matching Invoices with Purchase Orders
- Processing Purchase Orders
- Processing Debit Memos
- Processing Standard Pricing Information
- Preparation and Processing of AR Aging Reports
- Processing of Monthly AP Ledgers
- Processing of Monthly Sales Tax
Therefore, NBFCs must make continuous efforts to protect their domain and build a solid customer base. The
various types of loans in which new NBFCs are involved include early loans, student loans, medical loans,
travel loans, etc. therefore it requires significant investment in technology and the process of creating a
loan.
The NBFC partnership is an emerging concept in India where NBFC licensees are working with Fintech
transformation companies. It is done to gain leadership and facilitate funding. An agreement has been
prepared that emphasizes basic conditions such as the revenue sharing model between the two parties. It also
outlines the value of the NPA and its risks between the two parties involved.
Large NBFCs in size also face financial cracks allegedly controlled by the RBI but the medium size and small
size NBFC are different as they were able to attract a good FDI amount that enables them to pursue lending
by selling the base smoothly. The increasing use of Mobiles and smartphone logistics has encouraged NBFCs to
connect with low-income customers, using their smartphones through a loan initiation process, e-KYC, and
e-signature payments. Workflow has been postponed, production increased, accuracy, and cost savings are
maintained through the use of Robotic Automation. NBFCs also bring the implementation of various new
technologies. That technologies are e-KYC, data exchange, loan repayment, and cybersecurity collection and
security. The programming interface (APIs) were introduced and used for better communication between all
participants.
FinTechs is making rapid efforts in the field of acing technology making all operations of Banks and NBFCs
easier. Although NBFCs are trying to make their system automated, their pace is slowing down due to their
unpopular and traditional methods. So, fintech players are helpful. A standard disclosure of 20% of NBFC
loans is seen in the event that NBFC’s interaction with interest rates is determined by which Fintech or
banking company sponsors the remaining loan. New borrowing products and technically sound loans are
underpinning the foundation of a successful NBFC Collaboration.
