RBI establishes working group to regulate digital lending apps By CIOReviewIndia Team

RBI establishes working group to regulate digital lending apps

CIOReviewIndia Team | Wednesday, 12 May 2021, 11:15 IST

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RBI establishes working group to regulate digital lending appsRBI constituting a Working Group to inspect India’s untrustworthy loan apps nuisance was first reported in January.

In December 2020, RBI had issued a public advisory against unauthorised loans apps, after various media reports highlighted cases where the loan recovery methods employed by such unregulated lending apps led to their customers committing suicide.

Google has also laid down new rules to tackle India’s unsavory loan apps menace.

The Reserve Bank of India (RBI) has set up a Working Group (WG) to regulate digital lending mobile applications, amid increasing reports of such online loan platforms charging exorbitant interest rates and harassing their customers.

“Recent spurt and popularity of online lending platforms/mobile lending apps have raised serious concerns which have wider systemic implications,” RBI stated in a statement.

“Against this backdrop, a Working Group (WG) is being set up to study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players so that an appropriate regulatory approach can be put in place,” the statement added.

News about RBI constituting a WG to inspect India’s dubious loan apps menace was first reported in January. According to reports at the time, the WG would evaluate digital lending activities and assess the penetration and standards of outsourced digital lending activities in RBI regulated entities and identify risks posed by unregulated digital lending to financial stability, regulated entities and consumers. It would also recommend a robust fair practices code for digital lending players, insourced or outsourced and suggest better consumer protection measures.

where the loan recovery methods employed by such unregulated digital lending apps led to their customers committing suicide.

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