The Reserve Bank of India (RBI) on Wednesday cautioned members of public against unauthorised digital lending platforms/ mobile apps.

The central bank asked individuals/ small businesses to report such apps/ bank account information associated with the apps to concerned law enforcement agencies or use Sachet portal (https://sachet.rbi.org.in) to file an on-line complaint.

The RBI’s caution comes in the wake of reports about individuals/small businesses falling prey to growing number of unauthorised digital lending platforms/mobile apps on promises of getting loans in quick and hassle-free manner.

The central bank noted that 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.

“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.

More transparency

Moreover, consumers should never share copies of KYC (know your customer) documents with unidentified persons, unverified/ unauthorised apps.

The RBI emphasised that it has mandated that digital lending platforms which are used on behalf of banks and NBFCs (non-banking finance companies) should disclose name of the bank(s) or NBFC(s) upfront to the customers.

The names and addresses of the NBFCs registered with the RBI can be accessed from its website and the portal for filing complaints against the entities regulated by the RBI can be accessed through https://cms.rbi.org.in.

The central bank underscored that legitimate public lending activities can be undertaken by banks, NBFCs registered with the RBI and other entities that are regulated by the State governments under statutory provisions, such as the money lending acts of the States concerned.

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