RBI cautions against unauthorized digital lending platforms, mobile apps

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RBI

Hyderabad: With at least three suicides reported in Telangana following alleged harassment by executives of illegal online instant loan apps, the Reserve Bank of India has issued a warning on Wednesday, cautioning the public against unauthorized digital lending platforms and mobile apps.

Citing reports on individuals and small businesses falling prey to the growing number of unauthorized digital lending platforms and mobile apps on promises of getting loans in a quick and hassle-free manner, RBI Chief General Manager Yogesh Dayal said in a press release that the reports also referred to excessive rates of interest and additional hidden charges being 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.

Legitimate public lending activities can be undertaken by Banks, Non-Banking Financial Companies (NBFCs) registered with RBI and other entities who are regulated by State governments under statutory provisions, such as the money lending acts of the concerned States.

“Members of public are hereby cautioned not to fall prey to such unscrupulous activities and verify the antecedents of the company/ firm offering loans online or through mobile apps. Moreover, consumers should never share copies of KYC documents with unidentified persons, unverified/unauthorised Apps and should report such Apps/Bank Account information associated with the Apps to concerned law enforcement agencies or use Sachet portal (https://sachet.rbi.org.in) to file an on-line complaint,” Dayal said in the release.

The release also said Reserve Bank had also mandated that digital lending platforms which are used on behalf of Banks and NBFCs should disclose the name of the Bank(s) or NBFC(s) upfront to the customers. The names and addresses of the NBFCs registered with the Reserve Bank can be accessed from https://www.rbi.org.in/Scripts/BS_NBFCList.aspx while the portal for filing complaints against the entities regulated by the RBI can be accessed through https://cms.rbi.org.in.