Delhi High Court issues opinion in advocacy to regulate digital lending platforms

The Delhi High Court today issued an opinion in a filed lawsuit seeking the regulation and oversight of digital lending platforms. The Center was invited to submit its response to the petition before 19.02.2021. The petition refers to a circular dated 23.12.2020 issued by the Reserve Bank of India warning of unauthorized digital lending platforms and calls for regulation and oversight of the work. .

The Delhi High Court today issued an opinion in a filed lawsuit seeking the regulation and oversight of digital lending platforms. The Center was invited to submit its response to the petition before 19.02.2021.

The petition refers to a circular dated 23.12.2020 issued by the Reserve Bank of India warning of unauthorized digital lending platforms and calls for regulation and oversight over the operation of online digital lenders working through apps. mobile software and other media.

Among other things, the petition also highlights the imposition of exorbitant interest by these lenders on the loans, and calls for the fixing of a maximum interest rate applicable by these lenders, as a solution.

The establishment of a grievance mechanism for borrowers in each state was also sought.

The petitioner states in his plea that “to date there are around 300 instant personal loan applications”, which “grant loans ranging from Rs 1,500 / – to Rs 30,000 / – for a term of approximately 7 to 15 days. They deduct almost 35% to 45% of the loan money as a platform fee / service fee / processing fee and transfer the money left over to the borrower’s bank accounts. “

RBI, in its December circular, said that “there have been reports of individuals / small businesses falling prey to a growing number of unauthorized digital lending platforms / mobile apps by promising to obtain quick and hassle free loans. These reports also refer to excessive interest rates and additional hidden fees charged to borrowers; the adoption of unacceptable and authoritarian methods of collection; and the misuse of agreements to access data on borrowers’ cell phones. “

“Members of the public are hereby cautioned not to fall prey to such unscrupulous activity and to check the background of the company / business offering loans online or through mobile apps.”

Click here to download the petition

[Read Petition]

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