Over 600 illegal loan apps operating in India: RBI report
Over 600 illegal loan applications operating in India: RBI report
New Delhi: A report by the Reserve Bank of India (RBI) working group (WG) on digital lending, including lending through online platforms and mobile apps, noted more than 600 illegal lending apps operating in India. These apps, mainly used to defraud unsuspecting people, are available on several app stores for Android users around the country, according to the report.
During their work to prepare a detailed digital lending report and suggest recommendations, the working group discovered that there were over 1,100 unique lending applications that could be searchable using words. keys such as loan, instant loan and quick loan. According to the report, these apps were available in 81 app stores from January 1, 2021 to February 28, 2021.
The RBI panel pointed out that Sachet, a portal established by the Reserve Bank under the State Level Coordinating Committee (SLCC) mechanism for registering public complaints, has received a considerable number of growing complaints about digital loan apps that cheat people. Approximately 2,562 complaints were received from January 2020 to March 2021.
“The majority of complaints relate to loan applications promoted by entities not regulated by the Reserve Bank, such as companies other than NBFC (non-bank financial corporation), unincorporated entities and individuals,” notes the report. Another significant number of complaints relate to loan applications in partnership with NBFCs, especially smaller ones (asset size less than Rs 1,000 crore, he noted.
Most of the complaints were received from Maharashtra, followed by Karnataka, Delhi, Haryana, Telangana, Andhra Pradesh, Uttar Pradesh, West Bengal, Tamil Nadu and Gujarat, a- he noted.
After the publication of the press release dated December 23, 2020 by RBI warning the public against unauthorized digital lending platforms / mobile applications and raising awareness of the registration of complaints against these lenders on Sachet, a significant increase in complaints was observed with December 2020 recording the maximum number of complaints at over 35 percent of the total complaints. It’s still just a start, but trends point to a steady decline in complaints since January 2021, according to the report.