India’s central bank warns people of unauthorized digital loan apps that promise quick loans

  • Reserve Bank of India has sent warning about unauthorized digital lending platforms and apps, which promise loans” actualkeyword=”quick loans”>quick loans.
  • With the coronavirus pandemic, more and more people are turning to digital apps that offer hassle-free instant loans.
  • In Telangana, 11 people have so far been arrested in connection with such dubious loan companies.

The Reserve Bank of India (RBI) sent a warning regarding unauthorized digital lending platforms and apps, which promise fast lending.

“Legitimate public lending activities may be undertaken by banks, non-bank financial corporations (NBFCs) registered with the RBI, and other entities regulated by state governments under statutory provisions, such as bank laws. money lending from the states concerned, ”the regulator’s statement said.

With the coronavirus pandemic, more and more people are turning to digital apps that offer hassle-free instant loans. However, reports have surfaced of fraudulent cases resulting from such online practices. In
Telangana, 11 people have been arrested so far in connection with these dubious loan companies. the
Cyberabad Police also reportedly wrote to Google Play Store regarding 259 of these mics loan applications.

According to a
News minute report, at least five people have committed suicide in the state as a result of the harassment of these instant loan applications.

In its official statement today, the RBI cited the growing reports of online loan fraud which also has accusations of “excessive interest rates and additional hidden fees charged to borrowers; the adoption of unacceptable and authoritarian methods of recovery; and the misuse of agreements to access data on borrowers’ cell phones ”.

Going forward, the central bank has demanded that all digital lending platforms used by RBI and NBFC-registered banks must disclose the names of the bank and NBFC directly to consumers.

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