Latest news with #CustomerProtection
Reuters
7 days ago
- Business
- Reuters
UK watchdog to tighten rules for payment firms from May 2026
LONDON, Aug 7 (Reuters) - Britain's Financial Conduct Authority (FCA) said on Thursday it would roll out stricter rules for electronic payment firms from May 2026 to better safeguard customers' money. The regulator, which first laid out proposed reforms for payment firms in September, said companies would be required to keep customer money separate from their own funds, so that it could be returned if the firm fails. The payments sector has come under greater scrutiny as more consumers have become exposed to the risk of poor safeguarding. Between 2017 and 2022, the use of current accounts with online money and payment institutions - rather than traditional banks - has surged five-fold, a FCA survey shows, opens new tab. Under the tighter rules, larger payment firms will be subject to monthly reporting and annual audits, and they will be required to conduct daily checks to ensure the right amount of money is being safeguarded to protect customers. The rules will apply to payment institutions, e-money institutions (EMIs) and credit unions that issue e-money, the regulator said. EMIs flooded London over the last decade, benefiting from a lighter regulatory burden compared to banks. Last month foreign exchange broker Argentex, an e-money institution (EMI) since 2018, fell into special administration after succumbing to market volatility following a decline in the company's liquidity position. Failed payment firms had average shortfalls of 65% of their customers' funds over a five-year period to mid-2023, the FCA said. "People rely on payment firms to help manage their financial lives. But too often, when those firms fail, their customers are left out of pocket," said Matthew Long, director of payments and digital assets at the FCA. "We'll be watching closely to see if firms seize the opportunity and make effective improvements that their customers rightly deserve – this will help us to determine whether any further tightening of rules is necessary." UK Finance, a lobby group for the finance industry, said it was important that the new safeguarding rules were assessed for their impact and effectiveness before any further changes were made. "We support a robust and effective safeguarding regime that protects customers without placing unrealistic demands on businesses, particularly smaller firms," a spokesperson said. "Getting the balance right means having rules that are practical, proportionate, and internationally competitive."
Times of Oman
20-06-2025
- Business
- Times of Oman
India's new gold loan regulations to reshape lending landscape: S&P Global
New Delhi: S&P Global Ratings anticipates that the new regulations in Gold-Backed Loans will necessitate business model adjustments for lenders, with nimble players likely to gain a competitive edge. India's booming gold-backed loan sector is poised for significant changes with the introduction of new regulations, expected to be fully implemented by April 1, 2026. A key change involves the inclusion of interest payments until maturity in the calculation of Loan-to-Value (LTV) ratios, which could reduce the initial loan amount disbursed to borrowers. Additionally, credit appraisals for consumption-focused loans exceeding USD 3,000 and all income-generating loans will now require a cash flow analysis of borrowers, a departure from the traditional reliance on collateral valuation. The new rules also aim to enhance customer protection by standardizing the regulatory framework and addressing prudential and conduct gaps. This includes clearer guidelines on collateral handling and auction processes, mandating the return of pledged collateral and auction surpluses to borrowers within seven working days. Disbursements above INR 20,000 (approximately USD 231) will now be made directly to borrowers' bank accounts. The RBI is also emphasizing greater transparency in interest rate and fee disclosures and scrutinizing the outsourcing of core financial services. This shift will particularly impact nonbank financial companies (NBFCs) with large gold loan portfolios, such as Muthoot Finance Ltd. and Manappuram Finance Ltd., as they will need to invest in developing new risk management policies and training loan officers. Despite these adjustments, operational agility and service excellence, including quick and seamless loan disbursement, will remain crucial differentiators for lenders. NBFCs' strong customer relationships and investments in analytics are expected to help them maintain competitiveness. While these new models offer opportunities, they also introduce risks, particularly the heightened sensitivity to sharp corrections in gold prices if higher LTV norms are adopted for income-producing loans. Gold prices have surged by nearly 80% since late 2023, leading to a significant increase in collateral value and loan books. The RBI's regulatory treatment of NBFC gold loans, which applies a 100% risk weight, helps mitigate price risk, although banks currently benefit from a 0% risk weight on these loans.
