New Delhi: As many as 600 “illegal loan apps” are there in several app stores for Android users in India, a Reserve Bank of India (RBI) panel has found. A total of around 1,100 unique Indian loan apps that have the keywords such as loan, instant loan, quick loan, etc, are available in the App stores. With an aim to prevent illegal digital lending activities, RBI has proposed the Government of India to formulate a new legislation. The details have been mentioned in a report of the RBI Working Group on digital lending including lending through online platforms and mobile apps.
“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 RBI report says.
“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 says.
Around 2,562 complaints have been received from January 2020 to March 2021 against digital lending apps. The maximum number of complaints have been received in Maharashtra, followed by Karnataka, Delhi, Haryana, Telangana, Andhra Pradesh, Uttar Pradesh, West Bengal, Tamil Nadu, and Gujarat, according to the RBI report.
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. Another significant chunk of complaints pertains to lending apps partnering with NBFCs especially smaller NBFCs (asset size of less than Rs 1000 crore), the RBI report stated.
RBI had constituted a Working Group (WG) on digital lending including lending through online platforms and mobile apps on January 13, 2021. The WG was set up in the backdrop of business conduct and customer protection concerns arising out of the spurt in digital lending activities. The WG has since submitted its report. The thrust of the report has been on enhancing customer protection and making the digital lending ecosystem safe and sound while encouraging innovation, the RBI has stated.