National

Beware of illegal digital lending apps: RBI

Online lenders have been accused of high-handed recovery practices.  

The Reserve Bank of India has advised public to be wary of unauthorised digital lending platforms and mobile apps.

Taking note of reports about individuals and small businesses falling prey to a growing number of unauthorised digital lending platforms/mobile apps, the central bank on Wednesday said “members of public are cautioned not to fall prey to such unscrupulous activities.” It urged them to verify antecedents of the company/ firm offering loans online or through mobile apps.

The advisory comes in the backdrop of at least three borrowers in Telangana committing suicide in the recent past, following alleged harassment by personnel of such lenders, and many more complaining of being subjected to coercive methods after defaulting on repayments.

The RBI said the reports cited the excessive rates of interest and additional hidden charges demanded from borrowers; adoption of unacceptable and high-handed recovery methods; and misuse of agreements to access data on the mobile phones of the borrowers. They also pointed to how unauthorised digital lending platforms/mobile apps attracted borrowers with promise of loans in a quick and hassle-free manner.

Cautioning people against falling prey to “such unscrupulous activities,” the RBI said “legitimate public lending activities can be undertaken by banks, non-banking financial companies (NBFCs) registered with RBI and other entities who are regulated by the State governments under statutory provisions, such as the money lending acts of the States concerned.”

Online complaint

The central bank also advised consumers never to share copies of KYC documents with unidentified persons or unverified/unauthorised apps. They can report such apps/bank account information associated with the apps to law enforcement agencies concerned or use sachet portal (https://sachet.rbi.org.in) to file complaint.

The RBI said it had mandated digital lending platforms used on behalf of banks and NBFCs to disclose name of the bank(s) or NBFC(s) upfront to the customers. Coordinates of NBFCs registered can be accessed on RBI website. The portal for filing complaints against the regulated entities can be accessed through https://cms.rbi.org.in, the release said.


Our code of editorial values

Related Topics
This article is closed for comments.
Please Email the Editor

Printable version | Sep 24, 2021 2:43:28 PM | https://www.thehindu.com/news/national/be-wary-of-unauthorised-digital-lending-platforms-apps-rbi/article33404023.ece

Next Story