The Reserve Bank of India has suggested ways to prevent loan app scams for customers who borrow money from unregistered digital lending apps. In a press conference scheduled after the bi monthly Monetary Policy Committee meet days ago, RBI governor Shaktikanta Das said that such borrowers should approach the local police in case of any issue. The central bank on the day clearly suggested that it will only take action against entities that are registered with it. Days later, the RBI governor also said that a broad regulatory infrastructure will be set up soon to deal with these apps.
Das said that the RBI website has a list of apps which are registered with it on the website. He requested people to check whether the app is registered with RBI or not before using these apps. If the app is registered, the central bank will take immediate action in case of any wrongdoing.
The RBI governor said whenever it gets a complaint from any customer, the central bank directs customers of such unregistered apps to approach the local police, which will conduct an investigation and take necessary action on the issue.
The RBI website has a list of apps that are registered with it on the website, the governor said, adding that the police in many states have acted against the wrongdoers as per the provisions of the law.
“It’s my humble request to all those using such apps to first check if the app is RBI registered or not. If the app is RBI-registered, the central bank will act immediately in case of any misdoing, I assure you,” Das said in the customary post-policy press interaction. His comments came at a time when a host of alleged suicides abetted by harassment by agents or officials of lending apps are being reported.
RBI to Come Out with Regulatory Framework for Digital Lending Apps
On June 10, Thursday, Shaktikanta Das said addressing the Iconic Week Celebrations organised by the Central Board of Indirect Taxes and Customs (CBIC) that a broad regulatory architecture is to be developed soon with digital loan apps.
“I think very soon we will be coming out with a broad regulatory architecture which should be able to address the challenges that we are confronted with regard to lending through digital platforms, many of which are unauthorised, unregistered and, I should say, illegal,” Das added.
As per a report published by the RBI in November last year, 600 out of 1,100 lending apps available to Android users in India across as many as 81 app stores at present are not legal. This was reported on basis of data from from January 01, 2021 to February 28, 2021.
Sachet, a portal established by the Reserve Bank under State Level Coordination Committee (SLCC) mechanism for registering complaints by public, has been receiving significantly increasing number of complaints against digital lending apps. Majority of the complaints pertain to lending apps promoted by entities not regulated by the Reserve Bank such as companies other than NBFCs, unincorporated bodies and individuals, the report said.
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