The Indian government’s Fintech industry has made significant contributions to the country’s economy, according to Prime Minister Narendra Modi. In order to highlight the industry’s expansion and inclusion, he emphasised the fact that 40% of all digital transactions worldwide occur in India. Although there has been a growth in the number of clients using digital platforms for transactions, we are also observing an increase in bogus lending platforms that are damaging the reputation of the digital loan business.
Users can take the following steps to make sure they are dealing with a Legitimate Digital Lender:
According to a study by the Reserve Bank of India’s (RBI) working committee on computerised lending, there are up to 600 extortion credit apps b
available to Android users in a few Indian app shops. Therefore, before to putting it up, the credit candidate should first verify the application’s legitimacy, including its names, positions, reviews of the product store, and other factors.
The details of the company operating the application, including its website, contact information, actual office address in Asia, as well as the details of the banks issuing credits through the product, must also be obtained by customers.
Before applying for a loan, users should also conduct their research and try to find out information about the firm running the app, such as its website, contact information, physical office address in India, and the information of lenders disbursing loans through the app. Rogue applications may provide inaccurate or inconsistent physical addresses. One such software provided a phoney location that included the words “BIADA” a Bihar government agency and the name of a street in China. Therefore, a simple watchful information check might occasionally reveal the malicious programmes.
It’s crucial to verify the loan tenure and the names of the lending firms connected to the app (according to a recent Google guideline, lending applications must publish the names of all registered NBFCs and banks it is connected to) (most of the play stores do not allow short-term personal loans). It is also a requirement for NBFCs to post the names of the digital lending platforms/apps on their website in accordance with RBI recommendations on digital lending platforms dated 24 June 2020.
It is crucial to verify the identities of the lending institutions connected to the app (according to a recent Google guideline, lending applications must provide the names of all registered NBFCs and banks connected to it) and the loans Tenure. Additionally, in accordance with RBI recommendations on digital lending platforms from June 24, 2020, NBFCs are required to display the names of digital lending platforms and apps on their websites.
Numerous fraudulent applications are known to misrepresent their affiliation with authorised NBFCs. Therefore, one should constantly examine the “Partner” section of the relevant NBFC’s website to confirm all the pertinent information about their approved digital platform providers. One should be wary of lending apps that are not listed on the lender’s website.
Data gathering by deceptively obtaining various permissions from a user and afterwards abusing them is a big worry that has been raised by the unlawful applications. After specifying the purpose of each data/access permission so received, apps have the right to collect a minimum of that is only individual data.
In accordance with the Fair Practice Code’s standards, a loan provider must be clear and forthright when disclosing information that is relevant to the borrower’s interest so that the borrower may make an educated choice. The majority of the time, fraudulent apps either don’t give loan documentation or don’t supply the relevant information required by RBI. Even when applying for a loan through digital means of financing, a user should consistently insist on a loan agreement. They should also make sure that the loan agreement clearly states information such as the name of the actual lender, processing costs, annualised interest rates, penalties, and repayment terms.