600 Illegal Lending Apps Found By RBI. Details here

A working group set up by RBI has found a considerable number of illegal lending apps
A working group set up by RBI has found a considerable number of illegal lending apps

Reserve Bank of India (RBI) Governor Shaktikanta Das last week said that a report on digital lending apps is in an advanced stage of examination.

The report is being prepared in the wake of thousands of complaints received by RBI and law enforcement agencies against mostly unregistered lending platforms harassing people over non-payment or delay in disbursement of loans taken from them.

When the RBI Governor was asked about action being taken against such entities, Mr Das had said that most of these lending apps are unregistered and therefore if people have complaints related to such entities, then they should lodge police complaints.

However if RBI receives complaints against lending platforms, which are registered with it, then the central bank will take action, the Governor had said.

At the same time though, Mr Das had recommended that people should use their discretion while seeking services of such lending apps.

"Most of these apps are unregistered and whatever they do, the law enforcement agencies act against them. A report on digital lending apps is in an advanced stages of examination.... Customers need to first see whether such apps are registered or not, before using them," he had said.

While the RBI Governor had said that details of registered lending apps are available on the central bank's website, a working group set up by the RBI had found that 600 illegal lending apps existed between January 1, 2021 and February 28, 2021.

In addition to this, as per "Sachet" portal of the RBI - which registers complaints by people against unregistered entities - around 2,562 complaints against digital lending apps had been received between January 1, 2020 and March 31, 2021.

Of these 2,562 complaints, Maharashtra led among all the states with 572 complaints, followed by Karnataka (394), Delhi (352) and Haryana (314). 

According to the Finance Ministry, RBI has been designated as the nodal department for dealing with complaints against unauthorised digital lending platforms as well as mobile apps. Also, a mechanism to handle specific references on unauthorised digital lending platforms and mobile apps has also been laid down.

Finance Ministry sources said that following due process specified in Information Technology Act 2000, the Ministry of Electronics and Information Technology had also blocked 27 unlawful loan lending apps.