The Reserve Bank of India (RBI) on Wednesday warned consumers against questionable digital money lenders that promise loans in seconds at exorbitant interest rates and then use their powers to recover installments.
The Central Bank in a statement said that there have been reports of individuals / small businesses falling victim to a growing number of unauthorized mobile app / digital lending platforms with promises to get loans quickly and smoothly. These reports also refer to excessive interest rates and additional hidden charges that are exacted from borrowers; adoption of unacceptable and overbearing recovery methods; and misuse of agreements to access data on borrowers’ mobile phones.
“Members of the public are cautioned not to fall prey to such unscrupulous activity and to check the background of the company / firm offering loans online or via mobile applications,” RBI said.
Furthermore, consumers should never share copies of KYC documents with unidentified persons, unverified / unauthorized applications and should report such application information / bank accounts associated with the applications to interested law enforcement agencies or use the Sachet portal (https: / /sachet.rbi.org). .in) to file a complaint online.
Banks, RBI-registered Non-Bank Finance Companies (NBFCs), and other entities that are regulated by state governments under statutory provisions may conduct legitimate public lending activities, such as the money lending laws of the states in question. , said.
Reserve Bank has also mandated that digital lending platforms used on behalf of banks and NBFCs must disclose the name of banks or NBFC in advance to clients.
.
