New Delhi: More than one in two Indian consumers using instant loan apps are facing exorbitant interest charges, extortion and data misuse, as the Reserve Bank of India (RBI) unregistered digital lending apps. takes a tough stance against ., a new report showed on Tuesday. While 58 per cent citizens said that when they or any of their family/household employees took a loan using the Tatkal loan app in the last two years, they were charged an annual interest of more than 25 per cent.
According to a report by community social media platform LocalCircle, more than 54 percent of citizens experienced extortion or misuse of data during the survey process. (Also read:Odisha Police informs Google to remove fake loan apps from Google Play Store)
The platform on Tuesday wrote to RBI Governor Shaktikanta Das and IT Minister Ashwini Vaishnav requesting them to take cognizance of the survey findings and take further action on such instant loan apps. According to MeitY, it has blocked 27 such fake instant loan apps.
RBI has also barred non-bank prepaid payment instruments (PPIs) from loading credit. “PPI-MD (PPI-Master Instruction) does not permit loading of PPIs from credit lines. Such practice, if followed, should be stopped immediately. Any non-compliance payment in this regard and may attract penal action under the provisions contained in the Settlement System Act, 2007,” as per the latest RBI directive.
Maharashtra Police’s cybercrime team recently wrote to Google Play Store asking customers to remove 69 loan apps after receiving hundreds of complaints of harassment and threats by fraudulent loan recovery agents. India has seen the rise of instant loan providers through smartphone-enabled fintech lending companies to help people meet their shortfall in funds. (Also read:RBI imposed a penalty of Rs 1 crore on Kotak Mahindra Bank, IndusInd Bank for these reasons)
Some instant loan apps, according to consumers, according to LocalCircles, charge up to 500 percent interest rate and use extortion methods to collect money from borrowers or loan defaulters.
“Some citizens also claim to have received phone calls for repayment of loans taken a year ago, even if they have paid the amount taken or more,” the report noted. On the other hand, there are several reports of borrowers sharing personal information, including Aadhar card, PAN card, etc., with third party platforms. “People have also reported in some cases how their parents received the message at a different location. The message about loan payments that they had given sometime back,” the report said.