Digital Loan Apps | Over 600 Apps Operating In India, MeitY Blocked 27: MoS Finance

Some of the major complaints received include issues of exorbitant interest and charges levied by digital lending apps, and the harassment of customers for loan repayments

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New Delhi: Stating the RBI findings of over 600 illegal lending apps operating in the country, the Centre on Monday said the Ministry of Electronics and Information Technology (MeitY) has managed to block 27 out of it.

In a written reply in the Lok Sabha, the MoS Finance said MeitY had blocked 27 unlawful loan lending apps following the due process specified in IT (Procedure and Safeguards for Blocking for Access of Information for Public) Rules, 2009.

What are other details on the operations of lending apps?

Bhagwat Karad, minister of state for finance, said 'Sachet', a portal established by the RBI for registering complaints has received around 2,562 complaints against digital lending apps from January 2020 to March 2021.

Some of the major complaints received include issues of exorbitant interest and charges levied by digital lending apps, and the harassment of customers for loan repayments.

"On 'Sachet' portal, complaints against lending apps promoted by entities not regulated by the RBI are sent to the registrar of companies for the Ministry of Corporate Affairs registered entities, and to Economic Offences Wing of the complainant’s state for unincorporated bodies and individuals," the minister said.

In his response, the minister noted according to the RBI’s Working Group study on digital lending, the majority of the complaints pertain to lending apps promoted by entities "not regulated by the RBI" such as companies other than non-banking financial companies, unincorporated bodies, and individuals.

On December 23, 2020, the RBI had cautioned the general public not to fall prey to "unscrupulous activities of unauthorised digital lending platforms or mobile apps".

It urged the users to verify the antecedents of the company or firm offering such loans, the MoS Finance said. The minister also pointed out the central bank advisories to states to keep a check on such platforms or apps through their respective law enforcement agencies.