Illegal Digital Lending Apps: There are more than 600 Illegal Digital Lending Apps running in the country which are also present on App Stores. The government has given this information to the Parliament. The government said that in the investigation of RBI, it has been found that more than 600 such apps are running in the country which work for giving loans illegally.
27 App Blocked
According to Minister of State for Finance Bhagwat Karad, the Ministry of Information Technology has blocked 27 such illegal lending apps. Also, RBI has launched a portal named Sachet, on which 2562 complaints have been received against digital lending apps between January 2020 and March 2021.
He told that the biggest allegation on these apps is that they charge a lot of interest as well as charge huge processing fees. Apart from this, they also harass their customers regarding loan repayment. Complaints against such digital apps are sent to the Registrar of Companies and the Economic Offenses Branch under the Ministry of Corporate Affairs for action as they are not regulated by RBI. RBI had also warned customers against such illegal apps on 23 December 2020.
RBI working group submitted report
Action will be taken against such Fintech companies which are running Digital Lending Apps illegally through which they are giving loans to the people. It has submitted its report to the Working Group of RBI constituted on Digital Lending through online platform and mobile app.
The Working Group has said in its report that more than half of the Digital Lending Apps in the country are running illegally. The working group of RBI has prepared this report with the objective of protecting the interests of customers and making the digital lending ecosystem a safe digital ecosystem. The working group has also suggested the creation of Self-Regulatory Organization (SRO) by the participants of the digital lending ecosystem.