Topics Covered: Cybersecurity related issues.
Beware of illegal digital lending apps: RBI:
Context:
RBI has released an advisory on digital lending apps.
Background:
The advisory comes in the backdrop of at least three borrowers in Telangana committing suicide in the recent past, following alleged harassment by personnel of such lenders, and many more complaining of being subjected to coercive methods after defaulting on repayments.
Highlights:
- Public should be wary of unauthorised digital lending platforms and mobile apps.
- Public should verify antecedents of the company/ firm offering loans online or through mobile apps.
- Consumers should never share copies of KYC documents with unidentified persons or unverified/unauthorised apps.
- They can report such apps/bank account information associated with the apps to law enforcement agencies concerned or use sachet portal (https://sachet.rbi.org.in) to file complaint.
What are the issues wrt digital lending apps?
- They attract borrowers with promise of loans in a quick and hassle-free manner.
- But, Excessive rates of interest and additional hidden charges are demanded from borrowers.
- Such platforms adopt unacceptable and high-handed recovery methods.
- They misuse agreements to access data on the mobile phones of the borrowers.
What next?
Cautioning people against falling prey to “such unscrupulous activities,” the RBI said “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 States concerned.”
Sources: the Hindu.
