More than half of the digital lending apps in the country are illegal, RBI working committee report

RBI On Illegal Digital Lending Apps: Such Fintech companies that are running Digital Lending Apps illegally, through which they are giving loans to the people, will be punished. It has submitted its report to the Working Group of RBI constituted on Digital Lending through online platform and mobile app. This working group has said in its report that more than half of the Digital Lending Apps in the country are running illegally.

The working group of RBI has prepared this report with the objective of protecting the interests of customers and making the digital lending ecosystem a safe digital ecosystem. The working group has also suggested the creation of Self-Regulatory Organization (SRO) by the participants of the digital lending ecosystem.
The working group has also suggested the central government to enact a law to stop illegal lending through mobile apps. According to the research done by the Working Group, out of 1100 Mobile Lending Apps, 600 are being run illegally.

The Working Group has said that on the digital loan service front, all loan repayment should be directly credited to the account of the digital lending company and the loan to whom the loan is being given should also be directly deposited into the borrower’s bank account.

This working group was constituted by RBI on 13 January 2021 under the chairmanship of Executive Director Jayant Kumar Dash. This group has suggested to get the digital lending mobile application verified by the nodal agency. This nodal agency will be created after consultation with all the stakeholders.

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