Governor of the Reserve Bank Shaktikanta Das said on Thursday that in order to enable consumers verify a digital lender, the bank intends to develop a public repository of DLAs deployed by its regulated firms. This move is meant to solve the issues caused by unauthorised digital lending applications (DLAs).
“Information on their DLAs will be reported and updated in this repository by the regulated enterprises (REs). Customers would find it easier to recognize unapproved lending apps with the use of this safeguard, according to Das.
The Reserve Bank of India (RBI) and other authorities overseeing the financial sector have also been urged by Union Finance Minister Nirmala Sitharaman to take more action to stop the surge in unapproved online lending. Given the current domestic and global macro-financial conditions, FM Sitharaman emphasized during the 28th Financial Stability and Development Council (FSDC) meeting the significance of regulators remaining vigilant and taking proactive measures to identify potential risks to financial stability.
The Ministry of Electronics and Information Technology (MeitY) issued a list of approved digital lending apps on its website, which was also shared by the RBI with the Ministry earlier this year. It is anticipated that this list would assist customers in finding respectable and legitimate lenders, preventing them from becoming victims of rogue applications.
In addition to imposing exorbitant interest rates, the illicit applications utilize unethical techniques such as coercion, extortion, and harassment in order to retrieve loans. According to media accounts, agents severely harass borrowers. In some cases, they even threaten them with personal information—like private photos—and even use that information as leverage.
Prior to this, from September 2022 to August 2023, Google deleted almost 2,200 digital lending apps (DLAs) from its app store.
The search engine giant has modified its guidelines for the PlayStore’s loan app enforcement. As a result, only applications released by regulated companies (REs) or those collaborating with REs are permitted.
