RBI Warns Public to Stay Alert against Unauthorized Digital Lending Platforms & Apps

Digital financial frauds and digital payment scams are not new in India. In fact, in some past cases, scammers even targeted well-known politicians, including the erstwhile Maharani of Patiala and Congress Member of Parliament (MP) Preneet Kaur. However, even after knowing very well about the scenario people fall prey to smart scammers. They use unique ideas to rob people.

The central bank said all digital lending platforms used on behalf of Banks and NBFCs should disclose name of the bank or NBFC upfront to the customers

Looking at such scenarios, the Reserve Bank of India (RBI) on Wednesday warned consumers against the questionable digital money lending entities that promise loans in seconds at exorbitant rates of interest, and then use muscle powers to recover dues. In an official release, RBI said that there have been reports about people falling prey to digital lending scam in order to get quick and hassle free loans. “Members of 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,” the central bank said in a statement. “Moreover, 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 to file an on-line complaint,” it added.

The central bank said all digital lending platforms used on behalf of Banks and NBFCs should disclose name of the bank or NBFC upfront to the customers. The names of and addresses of the NBFCs registered with the Reserve Bank can be accessed at the RBI website and the portal for filing complaints against the entities regulated by the RBI can be accessed through here.

The central bank’s caution to the public comes after reports about individuals and small businesses falling prey to growing number of unauthorized digital lending platforms and mobile apps on promises of getting loans in 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 said.