Flipkart is the first significant Indian internet retailer to obtain a non-banking financial company (NBFC) license from the Reserve Bank of India (RBI). The license, granted to its wholly-owned subsidiary Flipkart Finance Private Limited in March, permits the business to make direct loans to buyers and sellers without the assistance of third-party NBFCs or partner banks.
The change represents a paradigm shift in the way credit can be provided on the top e-commerce sites in India. The majority of online shops have up to now functioned as loan middlemen, providing EMI and Buy Now, Pay Later (BNPL) options through banks and regulated lenders.
Flipkart is now fully in control of the credit underwriting, loan disbursal, and recovery procedures with its new NBFC classification, which essentially positions it as a financier as well as a retailer.
Despite being prohibited from accepting deposits, which is a major constraint under NBFC regulations, Flipkart would be permitted to provide a variety of lending products. Working capital financing for its seller ecosystem, EMIs on purchases, and short-term personal loans are a few examples. It is also anticipated that the business will use its fintech platform, super.money, as well as its main marketplace to deliver its financing services.
