RBI cautions against unauthorised digital lending platforms; here's what borrowers should do

Some such lenders also take recourse to high-handed recovery methods.

The Reserve Bank of India (RBI) on December 23 cautioned users against unauthorised digital lending platforms and mobile applications that promise quick loans.

“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, such as the money lending acts of the concerned states,” the regulator said in a statement.How app-based loan sharks lay death-traps for borrowers

The central bank said it had received several reports of individuals and small businesses falling prey to such digital platforms that charge high rates of interest or demand additional hidden charges from borrowers.

Some such lenders also take recourse to high-handed recovery methods and even access private data saved on the mobile phones of the borrowers on the sly.

RBI has suggested some steps users can take to avoid such incidents in the future:

To begin with, people looking to borrow money must verify the antecedents of the companies offering loans online or through mobile apps.

The RBI has strongly advised against sharing KYC documents with unidentified persons or unauthorised apps.

In case a person comes across an unverified or unauthorised digital lending platform they must inform the concerned law enforcement authorities about it or visit the Sachet portal to register a complaint online.

Additionally, the RBI has also made it mandatory for all digital lending platforms used by RBI-registered banks and NBFCs to disclose the names of the bank and NBFC directly to the consumers. People can visit the RBI portal to check the list of NBFCs registered with the regulator.

Those looking to file complaints against the entities regulated by the RBI can visit https://cms.rbi.org.in.