The Delhi High Court Friday sought response of the Centre and the Reserve Bank of India (RBI) on a petition seeking regulation of online lending platforms operating through mobile apps.
A Bench of Chief Justice D.N. Patel and Justice Jyoti Singh issued notice to the Finance Ministry and RBI seeking their stand on the petition, which claimed such lending platforms charge exorbitant interests on the loans given by them.
Dharanidhar Karimojji, who was represented by advocate Prashant Bhushan, claimed that more than 300 mobile applications are providing instant loans ranging from ₹1,500 to ₹30,000 for seven to 15 day period.
The petition said these money lending platforms deduct almost 35% to 45% of the loan as platform fees, service charges or processing fees and only transfer the remaining money to the borrower’s bank accounts.
The plea claimed these entities charge exorbitant interests rates of 1% or more per day and in the event of non-payment of delay in repayment of the loaned amount.
Caution for public
It said these entities even call up everyone on the borrower’s contact list to humiliate and harass them into making payments. Mr. Bhushan said the RBI has issued a press note cautioning the general public about these platforms.
The plea sought directions to regulate and control working of online digital lenders doing business through mobile app or any other platform and stop them from charging exorbitant interest on loan from borrowers.
