As many as 7,813 complaints against banks and non-banking finance companies (NBFCs), pertaining to digital lending applications and recovery agents, were received under the Integrated Ombudsman Scheme of the Reserve Bank of India (RBI) during the last financial year, according to the Central government.
In a written reply to a question from Lok Sabha member Aparajita Sarangi, the Minister of State for Finance said the RBI had introduced the “The Reserve Bank - Integrated Ombudsman Scheme, 2021” wherein complaints against banks and NBFCs regarding digital lending could be lodged.
The ombudsman has the power to pass an award for any consequential loss suffered by the complainant up to ₹20 lakh, in addition to up to ₹1 lakh for the loss of the complainant’s time, and expenses incurred and the harassment/mental anguish caused.
The RBI has established a portal named “Sachet” under the State Level Coordination Committee mechanism for registering public complaints. It has also constituted a Working Group on digital lending, including lending through online platforms and mobile apps, to study all the aspects of digital lending activities in the regulated financial sector as well as by unregulated players.
“The thrust of the report has been on enhancing customer protection and making the digital lending ecosystem safe and sound while encouraging innovation. As per the findings of this report, majority of the complaints pertain to lending Apps promoted by entities not regulated by the RBI such as companies other than NBFCs, unincorporated bodies and individuals. Major concerns raised in such complaints were issues of exorbitant interest and charges levied by digital lending Apps, and harassment of customers for loan repayments,” said the reply.
Through a statement in December 2020, the RBI had cautioned the general public against falling prey to unscrupulous activities of unauthorised digital lending platforms/mobile apps and verify the antecedents of the entities offering such loans. It has also issued advisories to the State governments to keep a check on unauthorised digital lending platforms/mobile apps through their respective law enforcement agencies.
Besides, the government has notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, under the Information Technology Act, 2000, which provide for removal of Apps that are considered unlawful under the existing law, from the “appstore” as and when requested by an appropriate government or authorised agency.
