US credit reporting company FICO has cast doubt on the risk assessment methods used by some fintech lenders, AltFi reports. FICO senior vice president Andrew Jennings said some fintech business models "could pose significant unintended dangers, including negative impacts for consumers, lenders, investors and the overall financial system." Jennings singled out SoFi, which lends to students and graduates, for using educational qualifications in its scoring. In January SoFi dropped FICO, saying FICO scores were not useful in assessing people in its target market. The chief executive of the Bank of Baroda, India's second-largest state-owned bank has himself defended a crackdown on distressed assets by the central bank, FT.com reports. PS Jayakumar said the Bank of India's pressure to recognise and make provision for distressed loans to corporate sectors has helped stop the troubled public-sector lenders from lending to clients "who will get into trouble." His own bank reported a non-performing asset ratio of 11.2 per cent as of the end of June, up from 4.1 per cent a year before. The rise of third-party mobile payments in China is threatening commercial banks' access to the customer data, which is crucial to newly emerging financial and consumer business models, reports the Financial Times. Increasing numbers of Chinese consumers are switching from swiping plastic cards to scanning QR codes with mobile wallet apps, and this has has knocked US$20bn from banks' fee income in 2015, according to Kapronasia, a Shanghai-based fintech consultancy. The result is that UnionPay, along with issuing banks and acquiring banks, is haemorrhaging income from merchant fees. The Reserve Bank of India said it will now allow commercial banks to issue bonds denominated in rupees - also called Masala bonds - as part of a package of reforms to expand liquidity in the country's capital and currency markets, reports US online news service Law360. The central bank said commercial lenders will be able to issue Masala bonds, which are financial instruments through which Indian entities raise money from overseas markets in the rupee rather than foreign currency, to meet their capital requirements or to fund infrastructure. China's local governments, hoping to save their steel mills and coal miners, have announced a series of restructuring plans, enlisting the banks to take the hit by improving the terms of the loans or swapping them for bonds or equity in the struggling groups, FT.com reports. The reliance on the banking system to shoulder the burden comes at an inopportune moment, with China's banks already mired in bad debt -about 19 per cent of total commercial lending by some accounts.