The Reserve Bank of India (RBI) has received 1,509 complaints related to digital lending mobile applications, of which around 1,019 were against unregulated and unregistered digital loan apps, the Minister of State for Finance Anurag Thakur told Parliament. In terms of digital transactions, the central bank received 137,823 complaints in 2019-20, up by 113% from 64,607 complaints the previous year.
Several members of Parliament had raised the issue of predatory digital loan apps in the Lok Sabha, and sought responses from the government on what corrective steps it had taken or proposed to take up in order to protect the public. In his reply, Thakur said while the RBI had issued a circular in June last year to non-bank lenders and banks to step up their transparency and disclosure efforts on digital loan apps and platforms, it had also issued a warning to customers in December and has set up a working group to study all aspects of digital lending activities.
Around 490 complaints were filed against registered lenders who disburse loans through digital lending apps, Thakur said according to Lok Sabha Question No.948, February 8, 2021.”The matter has been taken up with the Chief Secretaries of the States requesting them to consider proactive intervention by the State law enforcement agencies as per applicable laws. Regional Directors of Regional Offices of the RBI are also in touch with the State Police,” he added.
Thankur also said that in the case of regulated non-bank financial companies, the complaints are sent to the RBI’s Ombudsman Scheme for NBFCs and other departments.
“In cases where the app is managed by a company not falling in the ambit of RBI, such complaints are taken up with concerned Registrar of Companies (RoC) in the State Level Coordination Committee.In cases where no information is available regarding the lending institution, then the complainant is asked to forward a copy of his / her loan agreement with the lending institution and upon examination the matter is shared with Economic Offences Wing, of respective State Governments in the State Level Coordination Committee,” Thakur said.
Digital transaction complaints up by 113%
According to the Annual Report of the RBI’s Ombudsman schemes for 2019-20, complaints related to digital transactions have grown by 113% to 137,823 for 2019-20 compared to 64,607 complaints in the previous year. Digital transaction complaints now account for 44.66% of all complaints received by the RBI’s Ombudsman, compared to 33% in the previous year, it said.
The RBI currently runs three separate Ombudsman Scheme, for banks, non-banks and digital transactions, respectively. It plans to merge all three schemes into a one holistic ‘One Nation One Ombudsman’ platform.
Instrument-wise complaints
- ATMs and Debit cards: 67,800 complaints in 2019-20 compared to 36,359 in 2018-19
- Mobile and electronic banking:41,300 complaints in 2019-20 compared to 14,794 in 2018-19
- Credit cards: 28,713 complaints in 2019-20 compared to 13,274 in 2018-19
- Digital payment transactions: 2,481 complaints in 2019-20 compared to 470 in 2018-19
- Pre-paid Instruments: 2,061 complaints, accounting for 83% of all complaints filed with the Ombudsman Scheme for Digital Transactions
Of the 67,800 complaints received by the RBI’s Ombudsman related to debit cards in 2019-20, around 31,832 complaints were related to account debited but cash not dispensed by ATMs (up by 64% from 2018-19) and around 15,752 complaints were related to debit in account without use of the card or details of the card (up by 251% 2018-19). Only 7,511 complaints filed with the RBI’s Ombudsman were related to stolen or cloned cards, up by 51% from the previous year.
Types of payments complaints
- Fund Transfers through Unified Payments Interface, Bharat Bill Payments or Bharat QR Code: 1,089 complaints or 43.89%
- Mobile/ Electronic fund transfers: 598 complaints or 24.10%
- Non-reversal of funds due to wrong beneficiary transfer by System Participant: 218 complaints or 8.79%
- Non-adherence of RBI guidelines to PPI: 198 complaints or 7.98%
- Violation of RBI Directives in relation to fees / charges: 58 complaints or 2.34%
- Out of subject: 75 complaints or 3.02%
- Others: 245 complaints or 9.88%
Around 56.12% of all complaints related to digital payments were settled through mutual agreements, while 43.88% of complaints were rejected on the grounds that the complaint was ‘not on grounds of complaint.’ This calls for creation of greater awareness among complainants about the Ombudsman Scheme for Digital Transactions, the RBI said.
Institution-wise complaints
It is important to note that this is not an exhaustive list of entities against whom complaints were filed between 2019-20, but a list of the entities that received the most complaints.
Pre-Paid Instruments
- PhonePe: 1,095 complaints, the majority of which were related to fund transfer issues, mobile/electronic transfers and non-adherence to PPI guidelines
- AmazonPay: 305 complaints, the majority of which were related to fund transfer issues, mobile/electronic transfers, non-reversal and non-adherence to PPI guidelines
- MobiKwik: 239 complaints, related to fund transfer issues, mobile/electronic transfers, non-reversal and non-adherence to PPI guidelines
- PayU: 152 complaints, related und transfer issues, mobile/electronic transfers and non-adherence to PPI guidelines
Bharat Bill Payments
- National Payments Corporation of India (BBPS Central Unit): 13 complaints related to fund transfer issues
- IndiaIdeas (BillDesk): 23 complaints related to fund transfer issues
- Avenues India: 19 complaints related to fund transfer issues
- CSC E-Governance: 19n complaints related to fund transfer issues, mobile/electronic transfers, and non-adherence to PPI guidelines
Payments Banks
- Paytm Payments Bank: 2,272, of which 951 were related to mobile/electronic transfer issues and 212 to ATM/Debit Cards
- Airtel Payments Bank: 1,420 complaints, of which 497 were related to mobile/electronic transfer issues and 68 to ATM/Debit Cards
- Fino Payments Bank: 205 complaints, of which 44 were related to mobile/electronic transfer issues and 33 to ATM/Debit Cards
Private Banks
- HDFC Bank: 27,169 complaints, of which of which 2,879 were related to ATM/Debit Cards, 6,002 to credit cards and 3,509 related to mobile/electronic transfer issues
- ICICI Bank: 21,372 complaints, of which of which 2,530 were related to ATM/Debit Cards, 3,356 to credit cards and 3,027 related to mobile/electronic transfer issues
- Axis Bank: 17,124 complaints, of which 2,378 were related to ATM/Debit Cards, 2,892 to credit cards and 2,349 related to mobile/electronic transfer issues
- All Private Banks: 98,645 complaints, of which 12,328 were related to ATM/Debit Cards, 17,768 to credit cards and 12,429 related to mobile/electronic transfer issues
Public Sector Banks
- State Bank of India: 82,984 complaints, of which 24,844 were related to ATM/Debit Cards, 1,145 to credit cards and 12,306 related to mobile/electronic transfer issues
- Punjab National Bank: 16,457 complaints, of which 4,913 were related to ATM/Debit Cards, 198 to credit cards and 2,616 related to mobile/electronic transfer issues
- Bank of Baroda: 13,883 complaints, of which 3,714 were related to ATM/Debit Cards, 329 to credit cards and 1,955 related to mobile/electronic transfer issues
- All Public Sector Banks: 1,75,506 complaints, of which 52,254 were related to ATM/Debit Cards, 2,341 to credit cards and 25,237 related to mobile/electronic transfer issues
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