Mumbai, Dec 23 : The Reserve Bank of India (RBI) on Wednesday warned individuals and small businesses against falling prey to a growing number of unauthorized digital lending platforms and mobile apps on the promise of getting loans fast and hassle free.
These platforms charge excessive interest rates and additional hidden fees, adopt unacceptable and overbearing collection methods, and abuse agreements to access data on borrowers’ mobile phones.
“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,” the central bank said.
Additionally, consumers should never share copies of KYC documents with unidentified persons, unverified / unauthorized applications and should report such incidents to relevant law enforcement.
Legitimate public lending activities can be undertaken by banks, non-bank financial corporations (NBFCs) registered with the RBI, and other entities that are regulated by state governments under statutory provisions.