The government today said as per the RBI findings, over 600 illegal lending apps are operating in the country and they are also available on app stores.
On corrective action taken by the government against them, MoS Finance, in a written reply in the Lok Sabha, said MeitY (Ministry of Electronics and Information Technology) had blocked 27 unlawful loan lending apps following the due process specified in IT (Procedure and Safeguards for Blocking for Access of Information for Public) Rules, 2009.
The minister said ‘Sachet’, a portal established by the RBI for registering complaints has received around 2,562 complaints against digital lending apps from January 2020 to March 2021.
Major concerns raised in such complaints were issues of exorbitant interest and charges levied by digital lending apps, and the harassment of customers for loan repayments.
Also read: The good and the bad of digital lending, in five charts
“On ‘Sachet’ portal, complaints against lending apps promoted by entities not regulated by the RBI are sent to the registrar of companies for the Ministry of Corporate Affairs registered entities, and to Economic Offences Wing of the complainant’s state for unincorporated bodies and individuals,” the minister said.
The minister said as per findings of the RBI’s Working Group on digital lending, the majority of the complaints pertain to lending apps promoted by entities “not regulated by the RBI” such as companies other than non-banking financial companies, unincorporated bodies and individuals.
The minister said on December 23, 2020, the RBI had cautioned the general public not to fall prey to “unscrupulous activities of unauthorised digital lending platforms or mobile apps”. It urged the users to verify the antecedents of the company or firm offering such loans, the MoS Finance said. The minister said the central bank has issued advisories to states to keep a check on such platforms or apps through their respective law enforcement agencies.
Also read: How India’s banking revolution has started without behemoths like HDFC, SBI
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