New Delhi: In a crucial development, the Reserve Bank of India (RBI) on Wednesday issued warning against individuals and small businesses against falling victim to growing number of unauthorised digital lending platforms and mobile apps on giving promises of loans in quick and hassle-free manner. Also Read - Bank Holiday Alert! Banks to Remain Shut For 12 Days in May 2021 | Check State-wise Full List
Issuing the warning, the RBI stated that these fake lending platforms charge excessive rates of interest and additional hidden charges, adopt unacceptable and high-handed recovery methods and misuse agreements to access data on mobile phones of borrowers. Also Read - 'India Was on Verge of Defeating COVID-19 But...' NITI Aayog Official Says Second Wave Hurting Economy
“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,” said the central bank in a statement. Also Read - Are You Saving Money By Putting in Savings Account? Actually NOT
The RBI also stated that the consumers should never share copies of Know Your Customer (KYC) documents with unidentified people, unverified/unauthorised apps and should report such incidents to concerned law enforcement agencies.
However, it said that the legitimate public lending activities can be undertaken by banks, non-banking financial companies (NBFCs) registered with the RBI and other entities who are regulated by state governments under statutory provisions.
The RBI said it has mandated that digital lending platforms which are used on behalf of Banks and NBFCs should disclose name of the Bank(s) or NBFC(s) upfront to the customers. It also said that the names and addresses of the NBFCs registered with the Reserve Bank can be accessed and the portal for filing complaints against the entities regulated by the RBI can be accessed through https://cms.rbi.org.in.