A Reserve Bank of India (RBI) task force (WG) on digital lending, including lending through online platforms and mobile apps, has come across more than 600 illegal lending apps operating in India.
These apps, mostly used to trick unsuspecting people, are available on several app stores for Android users around the country, the task force said in a report.
During their work to prepare a detailed digital lending report and suggest recommendations, the working group discovered that there were over 1,100 unique lending applications that could be searchable using words. keys such as loan, instant loan and quick loan.
These apps were available in 81 app stores from January 1, 2021 to February 28, 2021, he said.
Increase in complaints
The RBI panel pointed out that Sachet, a portal established by the Reserve Bank under the State Level Coordinating Committee (SLCC) mechanism for registering public complaints, has received a considerable number of growing complaints against digital loan applications.
Approximately 2,562 complaints were received from January 2020 to March 2021.
“The majority of complaints relate to loan applications promoted by entities not regulated by the Reserve Bank, such as companies other than NBFC (non-bank financial corporation), unincorporated entities and individuals,” notes the report.
Another significant number of complaints relate to loan applications partnered with NBFCs, especially smaller ones (asset size less than 1,000 crore, he noted.
Most of the complaints were received from Maharashtra, followed by Karnataka, Delhi, Haryana, Telangana, Andhra Pradesh, Uttar Pradesh, West Bengal, Tamil Nadu and Gujarat.