RBI cautions people against unauthorised Digital Lending Platforms/Mobile Apps

JAMMU, DECEMBER 24: Reserve Bank of India has cautioned the people against unauthorized Digital Lending Platforms/Mobile Apps following the reports about individuals/small businesses falling prey to them on promises of getting loans in a 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.

The RBI has informed that 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 the 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” an RBI handout stated. It further said that consumers should never share  copies of  KYC  documents  with  unidentified  persons,  unverified/unauthorized 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.

Reserve Bank has 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 here and the portal for filing complaints against the entities regulated by the RBI can be accessed through https://cms.rbi.org.in.