In a move to curb the rising issue of illegal lending applications misleading consumers, the Reserve Bank of India (RBI) has decided to launch a public digital lending app repository. This step will help borrowers easily verify if the lending app they intend to use is associated with a legitimate and regulated financial institution.
According to recent data, nearly 60% of loan apps available for download are not registered with any banking or non-banking financial company. These rogue apps falsely claim ties to reputed lenders and exploit customer data for extortion. Following multiple complaints around harassment during recovery and privacy breaches, the RBI issued guidelines in September to safeguard borrowers.
The upcoming registry will list all apps registered by entities regulated by the central bank like commercial banks, small finance banks, payment banks and NBFCs. Directly maintained by these organizations without RBI intervention, it will provide up-to-date details of any new or deleted lending apps. Accessible via the RBI website, the public repository aims to identify legal from illegal digital lenders in a hassle-free manner.
While fintech has expanded financial access, unethical operators persist due to lack of oversight. As more players enter the lucrative business, victims of unauthorized lending and aggressive recovery may rise. The registry will plug this loophole and uphold transparent practices. It reaffirms RBI's commitment to balancing financial inclusion with consumer protection in the rapidly evolving digital lending sphere.
