Nikhil Kamath on harassment by loan agents: 'If you're a victim, file a complaint at...'

Zerodha CEO Nithin Kamath called for measures to filter loan apps in stores.

Zerodha CEO and co-founder Nithin Kamath on Wednesday spoke out about apps that offer loans and the harassment meted out by their recovery agents which have on multiple occasions led to death by suicide for the borrowers.

Taking to Twitter, Kamath had a word of advice for the victims of such harassment -- file a complaint with the government.

"There has been a spate of suicides due to harassment by loan agents of shady and illegal predatory loan apps. If you are a victim of harassment, file a complaint at https://cybercrime.gov.in or call 1930. We have laws that protect you from harassment," he tweeted.

There has been a spate of suicides due to harassment by loan agents of shady and illegal predatory loan apps. If you are a victim of harassment, file a complaint at https://t.co/0hyaP1LJHc or call 1930. We have laws that protect you from harassment. 1/4

— Nithin Kamath (@Nithin0dha) July 18, 2023

The harassment in a number of reported cases relies on morphing publicly available information of the borrower, particularly personal pictures, in a compromising way. This leads to extreme embarrassment which is difficult to explain away, given that the explanation itself would reveal the extent of debt that person was reeling under.

Highlighting this, Nithin Kamath wrote, "These apps lend at exorbitant rates, as high as 100–200 percent. They also get access to all contacts and photos when users install the app. If they don't repay, they start harassing all the contacts with calls and lewd pictures that are morphed."

'It is insane to share all that information for a loan. It's also absurd to borrow money at rates of 50-100 percent per year. It is almost impossible for most people to repay the principal at those rates," he added.

Loan apps enable small-sized loans, which many individual borrowers take several times across different app-based lenders. But, if the borrowers have just lost their job or the salary is just enough to sustain timely repayments, then the equated monthly installments (EMI) just keep adding up. This leads to loan recovery sharks coming after the borrowers, their friends, and family.

Pointing out that a vast majority of these loan apps are illegal and unregulated, the Zerodha boss called for measures to filter such apps in stores. "Since many users discover these apps there, the app stores should do more to filter these shady apps from being listed," Kamath wrote.

Read more: Nithin Kamath on cyber risk: 'Single scam of Rs 20,000 crore affected lakhs of Indians'