Amid the rising reports of concerns related to the Digital Lending, the Reserve Bank of India (RBI) on Thursday announced creating a public repository of Digital Lending Apps (DLAs).
The move aims to aid the customers in verifying the claim of DLAs association with the Regulated Entities, Governor Shaktikanta Das said while announcing the deliberations of the MPC meet.
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Notably, in September 2022, RBI released guidelines on Digital Lending addressing protection of customers interest, data privacy, concerns on interest rates and recovery practices, mis-selling, etc.
Governor Das said that there were media reports that have highlighted continued presence of unscrupulous players in digital lending who falsely claim their association with RBI regulated entities.
How will the Digital lending app repository work?
According to the information shared by the Governor, the repository will be based on data submitted by the REs, without any intervention by RBI, directly to the repository.
This data will get updated as and when the REs report the details, i.e., addition of new DLAs or deletion of any existing DLA.
He said that the detailed instructions in this regard shall be issued shortly.
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Certain segments of personal loans continue to witness high growth
The RBI Governor highlighted that it is observed that the sectors in which pre-emptive regulatory measures were announced by the RBI in November last year have shown moderation in credit growth.
However, certain segments of personal loans continue to witness high growth, he said.
Excess leverage through retail loans, mostly for consumption purposes, needs careful monitoring from macro-prudential point of view,” he added.
“It calls for careful assessment and calibration of underwriting standards, as may be required, as well as post-sanction monitoring of such loans.”
Status of the Digital lending apps
RBI has earlier this year shared a whitelist of 442 unique digital lending applications with the IT Ministry which has resulted in a review of listing of such apps for customers.
As per the reports, from September 2022 to August 2023, Google has also removed over 2,200 digital lending apps from its app store.
Further, as reported by the PTI in March, the RBI is set to establishing a Digital India Trust Agency (DIGITA) to stop the mushrooming of illegal lending apps.
As per the report, the proposed agency will enable verification of digital lending apps and maintain a public register of verified apps, sources said.
Apps not carrying the ‘verified’ signature of DIGITA should be considered unauthorised for the purpose of law enforcement.
Once in place, DIGITA would be entrusted with the responsibility of vetting digital lending apps, it said.
