How many firms are giving online app-based loans? Govt has no data

The Reserve Bank of India has issued several warnings that the public should not fall prey to such unscrupulous activities and verify the companies offering loans online and through apps.

The ministry of corporate affairs (MCA) does not have a record of the number of registered companies in the country that provide online app-based loans, the government said.

The Reserve Bank of India has issued several warnings that the public should not fall prey to such unscrupulous activities and verify the companies offering loans online and through apps.

These applications were found imposing high rates of interest and additional hidden charges, and adopted high-handed recovery methods.

Google has removed about 100 money lending apps that were “possibly not in compliance with the applicable legal and regulatory framework” from December 2020 till January 20, 2021, the government had informed the Parliament last week.

On Monday, the Minister of State for Finance and Corporate Affairs Anurag Thakur informed the Parliament that the MCA does not capture the data of registered companies providing online lending services.

He said that the RBI has received about 1,509 complaints against digital lending applications, and the central bank is taking steps to address the risk from operations of such online lending platforms.

Where complaints have been of non-banking financial companies (NBFCs) registered with the RBI, such complaints are forwarded to the NBFC ombudsman or the Consumer Education and Protection Cell for grievance resolution.

For complaints received for an app managed by a company not falling under the ambit of the RBI, such complaints are taken up with the concerned Registrar of Companies (RoC) in the state-level coordination committee.

In cases where no information is available regarding the lending institution, the complainant is asked to forward a copy of the loan agreement with the lending institution.

Upon examination, the matter is shared with the Economic Offences Wing of the respective state governments in the state-level coordination committee.

Thakur also said that several steps have been taken by the RBI to address concerns and risks emanating from the operations of such online platforms that include taking up the matter with state chief secretaries for proactive intervention by state law enforcement agencies.

A working group has also been set up to study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players.

This is being done so that an appropriate regulatory approach can be put in place, Thakur said.

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