600 Illegal Loans Apps In Stores For Android Users: RBI Report

New Delhi: In a major development, the Reserve Bank of India's (RBI) panel revealed that there are 600 illegal loans apps are present in several app stores for android users in India.

According to RBI Working Group on digital lending including lending through online platforms and mobile apps, there are also at least 1,100 unique Indian loan apps that have the keywords: loan, instant loan, quick loan, etc.

Following this, the banker's bank has proposed the government to frame a new legislation in a bid to prevent illegal digital activities.

"No.of App Stores in which Indian loan apps are available~81. No. of unique Indian loan apps that have the keywords: loan, instant loan, quick loan, etc. ~1100. No. of illegal loan apps ~600," the RBI report said.

''As per the findings of the WG, there were approximately 1100 lending apps available for Indian Android users across 80+ application stores (from January 01, 2021 to February 28, 2021),'' the report added.

Complaints against DLAs – Sachet, a portal established by the Reserve Bank under State Level Coordination Committee (SLCC) mechanism for registering complaints by public, has been receiving significantly increasing number of complaints against digital lending apps (around 2562 complaints from January 2020 to March 2021).

Majority of the complaints pertain to lending apps promoted by entities not regulated by the Reserve Bank such as companies other than NBFCs, unincorporated bodies and individuals.

According to the report, the maximum numbers of complaints have been received in Maharashtra, followed by Karnataka, Delhi, Haryana, Telangana, Andhra Pradesh, Uttar Pradesh, West Bengal, Tamil Nadu, and Gujarat.

''Another significant chunk of complaints pertains to lending apps partnering with NBFCs especially smaller NBFCs (asset size of less than Rs 1000 crore),'' the report said.

The Reserve Bank had constituted a Working Group (WG) on digital lending on January 13, 2021 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.

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