Banking regulator RBI (RBI) is also surprised by the rapid glut of mobile lending apps in the market. They are still in the dark about the total amount of loan disbursed through these apps.
The Working Group of Reserve Bank of India, formed to investigate digital lending activities, has identified 1000 such illegal lending mobile apps, which are trying to lure unsuspecting customers who need cash immediately. According to a close working group official, the group does not yet have information about how many mobile-app based lending companies are active in India. It is also possible that the same company is operating many apps. The process of reviewing online loan sharing apps is underway so that mobile apps working in the legal realm can be separated.
Banking regulator is also surprised by the rapid glut of mobile lending apps in the market. They are still in the dark about the total amount of loan disbursed through these apps. Also, RBI has started the process of removing illegal apps from many app stores.
Recently, a number of FIRs of the police have exposed the working of illegal apps which used to put huge amount of money in the market through the network of shell companies. They used to provide small loans to the needy immediately without pledging anything, but used to get the location data and contact list of the customer’s phone. Some applications also asked for a copy of the customer base.
SBI cautioned customers! Do not forget to use this app, otherwise your bank account will be empty
Market heated up after lockdown
Sources say that the RBI has a big task to regulate the innovation of this newly emerging market without disturbing it. According to an official, “The working group has been told clearly that innovation should not be hurt but illegal players should be kept away from it. The market for digital payment system UPI based in apps is large. ” A Mumbai based consultant says that the market of instant online loans in India is hot due to the loss of thousands of jobs due to lockdown in April 2020. According to him, “Their demand increased when people got their regular income. It is surprising that these activities did not come on the radar of RBI for several months. ”He said that it works parallel to the already well-established credit card market.
Look at these apps
It is believed that in the eyes of the regulator, some players include MyBank, OneHop, CashB, Cashalo, Rupeefactor, OKCash, RupeeBazaar, Passalone, AMROUPI, Flip Cash, IRUPI, Ant Cash, RupeeBox, ZeroCash, CashCow, Moneymore, Koala Cash, Star loans, Get-a-Cash, Yurupi and Yoyo Cash. The RBI issued an advisory on 23 December 2020, after several reports about the brutal methods of recovery. The Reserve Bank has also asked customers to report such apps to any legal agency or file a complaint online. But shortly after, due to several cases of suicides being troubled by blackmailing online borrowers, the RBI finally had to form a working group on 13 January 2021 to investigate the seriousness of the case.
The first meeting of the working group took place on 19 January and in their first step, they are identifying such illegal mobile apps. Jayant Kumar Dash, Executive Director of RBI is the chairman of this working group. The group will submit its investigation report in 3 months. Pushpinder Kaur, operations head of the app Cash-e (CASHe), which works under the RBI regulated NBFC, says, “We are happy that RBI has taken the initiative to remove illegal apps. The future belongs to these fintech and online borrowers. “
