RBI Cautions Against Unauthorized Lending Platforms And Apps Promising Quick Loans

MUMBAI: The Reserve Bank of India (RBI) has release a note of caution about unauthorized digital lending platforms and apps promising quick loans in the wake of the rise in cases where people  and  small businesses are falling prey to growing number of unauthorised digital lending platforms/Mobile Apps on promises of getting loans in quick and hassle-free manner

These reports also refer 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 the 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 to file an on-line complaint.

Reserve Bank has also mandates that digital lending platforms which are used on behalf of Banks and NBFCs should disclose 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 here and the portal for filing complaints against the entities regulated by the RBI can be accessed through https://cms.rbi.org.in ., it said in it circular released on Wednesday.

The Cyber Crime sleuths in Cyberabad nabbed six members in connection with instant personal loan apps mafia like Cash Mama, Loan Zone and Dhana Dhan. These app were  were operating under the names of registered companies and were allgedly harrasing people after they tokk loans from these app. The arrests comes in the wake of an unemployed techie’s death by suicide in Hyderabad and an agriculture extension officer in Siddipet district in the last few days, allegedly owing to harassment and humiliation over repayment by these loan apps mafia.