Maharashtra, Karnataka, Delhi report maximum complaints against mobile based lending apps

The RBI has received more than 2,500 complaints against such unauthorized lending apps through its Sachet portal established under the State Level Coordination Committee mechanism for registering complaints by the public against such unregistered entities.

New Delhi: There are nearly 600 illegal mobile-based lending apps that are operating in the country and the Reserve Bank of India has been given the responsibility to deal with the complaints against them, Bhagwat Karad, the minister of state for finance said on Monday. Citing the data from the Reserve Bank’s Working Group on digital lending, the minister said the number of unauthorized mobile-based lending apps in February 2021 stood at around 600.

The RBI has received more than 2,500 complaints against such unauthorized lending apps through its Sachet portal established under the State Level Coordination Committee mechanism for registering complaints by the public against such unregistered entities. The data shared by the minister in the Lok Sabha showed that the maximum number of complaints were received from one of India’s most prosperous industrialized states, Maharashtra. The state alone accounted for more than one-fifth of the total complaints registered in the country against such unauthorized lending apps between January 2020 and March 2021.

Maharashtra accounts for one in five complaints

While 572 of the total 2,562 complaints were reported from Maharashtra against such illegal lending apps, Karnataka, which is home to India’s IT capital Bengaluru, reported the second highest number of complaints. During the same period, 394 complaints were reported from the state. India’s national capital Delhi is also not immune to such unethical business practices as 352 complaints, the third-highest in the country, were reported from the Union territory against such illegal mobile-based lending apps.

Delhi’s neighbouring state Haryana is the fourth state in the country that reported more than 300 complaints. In the South, while Telangana and Andhra Pradesh reported 185 and 144 complaints respectively in the mentioned period. India’s most populous state Uttar Pradesh reported 142 and West Bengal 138 complaints against digital lending apps. While Tamil Nadu reported 57 complaints, Prime Minister Narendra Modi’s home state Gujarat reported 56 complaints against digital lending apps.

Poor enforcement

According to the minister, 208 complaints were reported from other states and Union territories during this period. Although Reserve Bank’s Department of Supervision has devised a mechanism to handle specific references on unauthorised digital lending platforms and mobile apps, which includes asking the state government’s enforcement agencies to crackdown against such unauthorized lending apps, the crackdown against such mobile apps, both at the central and state level, is not enough to curb the menace.

For instance, according to the information given by the minister in the Parliament, the ministry of information and technology blocked 27 unlawful lending apps after following the rules framed under Section 69A of the Information Technology Act, 2000. As reported earlier by ETV Bharat, the Reserve Bank of India had last month banned CashBean, a mobile lending app promoted by the company owned by Opera internet browser.