The Reserve Bank of India has cautioned against unauthorised digital lending platforms or mobile apps, saying there have been reports of people falling prey to such platforms in the name of getting "loans in a quick and hassle-free manner".
The central bank, in a statement on Wednesday, said such unauthorised digital lending platforms or mobile apps are demanding excessive rates of interest and additional hidden charges from borrowers. They are also adopting "unacceptable and high-handed recovery methods", and are even misusing agreements on data access regarding borrowers' mobile phones.
The central bank said legitimate public lending activities could only be undertaken by the RBI-registered banks, and non-banking financial companies (NBFCs). Those are regulated by the state governments, under statutory provisions, such as their money lending acts, can also indulge in lending.
The RBI said people must verify the credentials of such companies or persons before falling prey. "Members of the public are hereby cautioned not to fall prey to such unscrupulous activities and verify the antecedents of the company or firm offering loans online or through mobile apps," it said.
Moreover, consumers should never share copies of KYC documents with unidentified persons, unauthorised apps and should report such apps to concerned law enforcement agencies or use sachet portal (sachet.rbi.org.in) to file an online complaint, the central bank said.
As per the Reserve Bank guidelines, digital lending platforms used on behalf of banks and NBFCs should disclose their names upfront to the customers. One can find names and addresses of NBFCs registered with the RBI at cms.rbi.org.in. People can also file complaints against the RBI-regulated entities at this portal.