Instant loan app scam: don’t fall prey to unauthorized mobile apps, warns RBI

Consumers should never share copies of KYC documents with unidentified, unverified / unauthorized applications, RBI said.

Hindustan Times, New Delhi | Throughhindustantimes.com | Edited by Poulomi Ghosh

The Reserve Bank of India has warned against loans offered by unauthorized digital platforms, with mobile apps promising a quick and hassle-free process. The warning comes amid a major instant loan app scam surfacing in the country with its multi-city network.

Three people have committed suicide in recent weeks after being harassed by debt collectors, as a result of which 17 people were arrested in Delhi, Gurugram and Hyderabad.

“It has been reported that individuals / small businesses are falling prey to the growing number of unauthorized digital lending platforms / mobile apps promising to get loans fast and hassle free. These reports also mention excessive interest rates and additional hidden fees charged to borrowers; the adoption of unacceptable and authoritarian methods of recovery; and the misuse of agreements to access data on borrowers’ cell phones, ”the RBI said in its notice.

Legitimate loans can be offered by banks, non-bank financial companies registered with the RBI and entities regulated by state governments, the RBI said urging people to check the backgrounds of entities that offer easy and lucrative loans. on various digital platforms.

“Members of the public are hereby cautioned not to fall prey to such unscrupulous activity and to check the background of the company / business offering loans online or through mobile apps,” he said. .

Urging people to never share copies of KYC documents with unidentified, unverified / unauthorized applications, RBI said such fraudulent activity can be reported to law enforcement agencies or to the Sachet portal. RBI (https://sachet.rbi.org.in).

“Reserve Bank also required that digital lending platforms used on behalf of banks and NBFCs disclose the name of the bank (s) or NBFCs to customers,” the notice reads.

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