Instant loan app scam: Do not fall prey to unauthorized mobile apps, warns RBI – Business news

Instant loan app scam: Do not fall prey to unauthorized mobile apps, warns RBI – Business news

The Reserve Bank of India has cautioned against loans being offered by unauthorized digital platforms, with mobile applications promising a quick and hassle-free process. Caution has come to light after a major instant loan app scam with its multi-city network in the country.

Three people killed themselves after alleged harassment from debt collectors over the last few weeks, after which 17 people were arrested from Delhi, Gurugram and Hyderabad.

“There have been reports about individuals / small businesses due to the increasing number of unauthorized digital lending platforms / mobile apps on the promise of getting loans in a quick and hassle free manner. These reports also mention exorbitant rates of interest and additional hidden fees demanded from borrowers; Adopt unacceptable and high-handed recovery methods; And misuse of agreements to use data on borrowers’ mobile phones, ”the RBI said in its notice.

Legitimate loans can be offered by banks, non-banking financial companies that are registered by the RBI and regulated by the state governments, RBI urged people to verify the background of institutions that are easy, attractive on various digital platforms Are offering loans.

“Members of the public are cautioned not to fall prey to such deceptive activities and for verification of firms offering loans to the company / firm online or through mobile apps,” it said.

Urging never to share copies of KYC documents with unidentified individuals, unverified / unauthorized apps, RBI said that such fraudulent activities were perpetrated by law enforcement agencies or RBI’s semper portal (https: //sachet.rbi .org.in).

The notice states that the Reserve Bank has also stated that the digital lending platform used by banks and NBFCs should disclose the name of the bank (s) or NBFC to the customers.

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