RBI Cautions Borrowers Against Use Of Unauthorised Apps Offering Quick Loans

The central bank said that users should never share copies of KYC documents with unidentified persons or unverified mobile applications, and report such apps to law enforcement agencies

RBI Cautions Borrowers Against Use Of Unauthorised Apps Offering Quick Loans

RBI said users can file an online complaint on the sachet portal-https://sachet.rbi.org.in

The Reserve Bank of India (RBI) on Wednesday, December 23, cautioned borrowers or users including, individuals and small businesses, against falling prey to the growing number of unauthorised digital lending platforms and mobile apps on promises of getting hassle-free, quick loans. The platforms charge excessive rates of interest and additional hidden charges, adopt unacceptable and high-handed recovery methods, and misuse the agreements to access data on mobile phones of borrowers. The central bank said that members of the public are cautioned not to fall prey to such unscrupulous activities and verify the antecedents of the company/firms offering loans online or through mobile apps.

According to the RBI, legitimate public lending activities can be undertaken by the banks, non-banking financial companies (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 concerned states.

For ensuring transparency, the central bank added that users should never share copies of KYC documents with unidentified persons, unverified or unauthorised mobile applications, and should report such apps or bank account information associated with the apps to the concerned law enforcement agencies. Borrowers can also use the sachet portal (https://sachet.rbi.org.in) to file an online complaint.

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Reserve Bank of India has also mandated that digital lending platforms that are used on behalf of the banks and NBFCs should disclose the name of the banks or NBFCs upfront to the borrowers. The names and addresses of the NBFCs registered with the central bank can be accessed on the official website of the RBI through the link: https://www.rbi.org.in/Scripts/BS_NBFCList.aspx. Additionally, the portal for filing complaints against the entities regulated by the central bank can be accessed through the link: https://cms.rbi.org.in , according to Reserve Bank of India.