To tackle issues with unauthorized online lending apps (DLAs), the Reserve Bank of India (RBI) will create a public repository. This new system will list DLAs used by regulated entities, helping consumers verify the legitimacy of digital lenders.
RBI Governor Shaktikanta Das announced that regulated entities will report and update information about their DLAs in this repository. This move aims to help consumers spot unauthorized online lending apps.
Union Finance Minister Nirmala Sitharaman recently urged financial regulators, including the RBI, to enhance measures against unauthorized online lending. At the 28th Financial Stability and Development Council (FSDC) meeting, she stressed the need for regulators to remain vigilant and proactively address risks to financial stability amid current macro-financial conditions.
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Earlier this year, the RBI provided a list of official digital lending apps to the Ministry of Electronics and Information Technology (MeitY). MeitY has published this list on its website to help consumers find legitimate lenders and avoid exploitation by illegal apps.
Illegal lending apps not only charge predatory interest rates but also use unethical recovery methods. Reports highlight severe harassment, including threats involving personal data like intimate photographs used for coercion.
From September 2022 to August 2023, Google removed over 2,200 digital lending apps from its Play Store. The company updated its policy to only allow apps published by RBI-regulated entities or those partnered with them.
