The Reserve Bank of India (RBI) on Wednesday cautioned people and small businesses against falling victims to growing number of unauthorised digital lending platforms and mobile apps on promises of getting loans in quick and hassle-free manner.
These platforms obviously charge excessive rates of interest and additional concealed charges, adopt unacceptable and high-handed recovery methods and misuse agreements to access data on mobile phones of borrowers.
Therefore RBI said, "Members of public are hereby cautioned not to fall prey to such unscrupulous activities and verify the antecedents of the company/firm offering loans online or through mobile apps,". Moreover, consumers should never share copies of KYC documents with unidentified persons, unverified/unauthorised apps and should report such incidents to concerned law enforcement agencies.
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.
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