The Reserve Bank of India has warned against unauthorized digital lending platforms or mobile apps, saying there have been reports that people have fallen prey to such platforms on behalf of the ‘Getting “Quick, Hassle-Free Loans.”
The central bank, in a statement released on Wednesday, said these unauthorized digital lending platforms or mobile apps demand excessive interest rates and additional hidden fees from borrowers. They also adopt “unacceptable and authoritarian collection methods,” and even abuse data access agreements on borrowers’ cell phones.
The central bank said legitimate public lending activities can only be undertaken by banks registered with the RBI and non-bank financial corporations (NBFCs). Those who are regulated by state governments, under statutory provisions, such as their money lending laws, can also engage in loans.
The RBI said people should verify the credentials of these companies or individuals before they fall prey. “Members of the public are hereby cautioned not to fall prey to such unscrupulous activity and to check the background of the business or business offering loans online or through mobile apps,” he said. -he declares.
Additionally, consumers should never share copies of KYC documents with unidentified persons, unauthorized applications and should report such applications to the relevant law enforcement authorities or use the sachet portal (sachet.rbi.org.in) to file a complaint online, the central bank said.
As per Reserve Bank guidelines, digital lending platforms used on behalf of banks and NBFCs must disclose their names to clients upfront. The names and addresses of NBFCs registered with the RBI can be found at cms.rbi.org.in. People can also file complaints against RBI regulated entities on this portal.