The Indian government has asked the Reserve Bank of India to prepare a 'whitelist' of digital loan apps operating in the country, amid thousands of complaints regarding the illegal operation of these platforms, according to a statement from the finance ministry.
Post the Covid pandemic, hundreds of online loan apps have entered the financial market in the nation, and most of these apps have a notorious history of charging unethical interest rates, and they even used to threaten borrowers to pay exorbitantly high interest rates.
These lenders also used to adopt predatory recovery practices, and several people all across the n nation committed suicide due to these unethical recovery ways.
Complaints regarding digital lending mounting in India
The move from the Central government comes just a few days after RBI tightened rules for digital lenders after complaints started mounting over unfair recovery practices.
In 2021, a probe conducted by the RBI found that over a thousand apps are operating in India illegally, targeting people in low-income income groups.
According to a Bloomberg report, digital lending in India is expected to hit $350 billion by 2023. However, due to unethical recovery tricks, these apps have been receiving criticism from all parts of the country.
"Strict actions should be taken against digital lending platforms in the nation. Our NGO is receiving hundreds of complaints everyday regarding the unethical practises embraced by these lenders. From sending threatening and obscene Whatsapp messages to character assassination, these digital lending apps are a real threat to the society," Advocate Jiyas Jamal, founder of Cyber Suraksha Foundation and a leading cybersecurity expert told International Business Times, India edition.
He added: "The government should take all the necessary steps to impose regulations. It is the need of the society, and it will surely save several lives who are now on the verge of suicide."