During the Covid-19 pandemic when people were struggling physically, mentally, and financially, several fake loan apps made their way in different App stores. After receiving multiple complaints, the Reserve Bank of India started actively monitoring the issue.
RBI received around 2,562 complaints from January 2020 to March 2021 and the majority of complaints were about lending apps not regulated by the Reserve Bank.
After proper research. A Reserve Bank of India (RBI) Working Group (WG) on digital lending has found more than 600 illegal loan apps operating in India. These apps are available on different app stores for Android. These lending apps are not under any regulatory body and charge high interest and later harries and abuse users if payment is missed.
The report also said that the Central government is considering bringing legislation to prevent illegal lending activities. It may introduce the Banning of Unregulated Lending Activities Act soon.
RBI is also making a nodal agency to handle the issue. This agency will verify apps and their financial details. It will also made a public register offering information about verified and trusted lending apps.
