The continuous reports of the approval of poor loans and also the recovery practices which is being followed by some platforms has become a major issue for which the RBI has cautioned the consumers to a high extent. The Digital Lenders Association also has been prompted by the RBI to currently issue a revised code of conduct which is to be followed after the regulator’s notice. A major report cited the excessive misuse of agreements to access the data on the mobile phone of the borrowers. Even such unauthorized digital lending platforms attracted the borrowers on a huge level along with the promising of loans in a hassle-free manner.
The Online complaint
According to the RBI, it had mandated the digital lending platforms which are generally used on the behalf of banks to disclose the name of the banks. The release even said that they had started a portal that can be used for filing the complaints against the regulated entities which can be conducted through a link issued by the RBI. The bank account information which is associated with the respective apps can be reported. In fact, it has become a major issue to file an online complaint.
The major advice for the public
The public is advised to verify properly the antecedents of the respective company which are duly offering the loans online or via the apps in the mobile. It is highly recommended by the RBI that the consumers must not share the copies of their “know your customer” documents with any kind of unauthorized applications or with an unknown person. The additional hidden changes which are recently been demanded at a large scale from the borrowers are being referred by the reports of the individuals. Also, while accessing the data on the mobile phones of the borrowers, the extreme misuse of the agreements could be found. For this, the law has been enforced for the customers so that they can report well if they do face such issues.
The strict second warning
Nothing actually goes unnoticed by the RBI. This is the second warning by the RBI against this kind of issue. This is not the first time that RBI has given this warning about these unauthorized digital lending practices. Before this also, this kind of thing became a huge issue. It is also been said by the RBI never outsourcing activity of the business diminishes the obligations of the bank as the regulatory compliance rests only with them.
The Policy Times suggestions
- All the costs must be listed clearly and also the fees arising from the service that is being offered. Indeed this kind of costs must be well explained with some illustrations.
- It must be taken into account that the RBI does not send the third warning so some preventive measures must be taken up.