RBI panel suggests separate law to prevent illegal digital lending via apps

Seeking to safeguard the interest of customers, a Reserve Bank working group has suggested enactment of a separate legislation to prevent illegal digital lending through apps.

The other suggestions of the working group include subjecting the digital lending apps to a verification process by a nodal agency and establishing a Self-Regulatory Organisation (SRO) covering the participants in the digital lending ecosystem.

“The thrust of the report has been on enhancing customer protection and making the digital lending ecosystem safe and sound while encouraging innovation,” RBI said in a release.

The RBI had in January 2021 constituted the working group under the chairmanship of Executive Director Jayant Kumar Dash on digital lending, including lending through online platforms and mobile apps.