Lok Sabha Question No. 948 (UNSTARRED), answered on 2021-02-08
Subject: Online Lending Apps
Ministry: FINANCE
Asked by: Supriya Sadanand Sule, Komati Reddy Venkat Reddy, Harish Dwivedi, Raghu Ramakrishna Raju Kanumuru, Amol Ramsing Kolhe, Kanimozhi Karunanidhi, Subhash Ramrao Bhamre, Y. S. Avinash Reddy, Sunil Dattatray Tatkare, Kuldeep Rai Sharma, K. Subbarayan, Geetha Viswanath Vanga, DNV Senthilkumar. S., Kotha Prabhakar  Reddy

## GOVT. OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION No. 948

TO BE ANSWERED ON THE FEBRUARY 8, 2021/MAGHA 19,1942(SAKA)

## 'Online Lending Apps'

## QUESTION

948.  SHRIMATI  SUPRIYA  SULE,  SHRI  KOMATI  REDDY  VENKAT  REDDY,  SHRI HARISH DWIVEDI, SHRI KANUMURU RAGHU RAMAKRISHNA RAJU, DR. AMOL RAMSING  KOLHE, SHRIMATI KANIMOZHI KARUNANIDHI, DR.  SUBHASH RAMRAO  BHAMRE,  SHRI  Y.S.  AVINASH  REDDY,  SHRI  SUNIL  DATTATRAY TATKARE,  SHRI  KULDEEP  RAI  SHARMA,  SHRI  SUBBARAYAN  K.,  SHRIMATI VANGA  GEETHA  VISWANATH,  DR.  DNV  SENTHILKUMAR  S.,  SHRI  KOTHA PRABHAKAR REDDY Hon'ble MPs.

Will the Minister of FINANCE be pleased to state:

- (a) the number of registered companies providing online Apps-based loan in the country at present;
- (b)  whether  the  Government  has  received  any  complaints  against  some  online  chit fund/lending Apps which are allegedly functioning in the absence of any clear regulatory guidelines, if so, the details thereof and the action taken against such Apps;

(c) whether the Reserve Bank of India has also cautioned against such unauthorised digital  lending  platforms,  if  so,  the  details  thereof  along  with  the  corrective  steps taken/proposed to be taken in this regard;

(d) whether the Government is aware that individual/ small business firms are falling prey to such lending platforms/Apps on promises of getting loans in hassle free quick manner whereas they are trapped to get instant loans at exceptionally high interest rates leading to the borrowers in some cases committing suicide after facing humiliation and harassment from the said lending Apps; and

- (e) if so, the details thereof along with the corrective steps taken/proposed to be taken by the Government to protect the public from such digital lending platforms?

## ANSWER

(MINISTER OF STATE IN THE MINISTRY OF FINANCE) (SHRI ANURAG SINGH THAKUR)

- (a)  It  has been informed by the Ministry of Corporate Affairs that this data is not captured by them. However, the total number of active registered companies is 13,16,704 as on 01.02.2021.
- (b) RBI  has  intimated  that  it  has  received  complaint  against  1509  digital  lending applications. The bifurcation of the same is mentioned in the table below:

| Subject                                                                          |   Total Complaints |
|----------------------------------------------------------------------------------|--------------------|
| Complaint against Registered NBFCs which are engaged in Digital Lending Platform |                490 |
| Complaint against Unregistered/ Unregulated Digital Loan applications            |               1019 |

The general Action taken by RBI upon receipt of complaint is mentioned below:

- i. In  cases where the app is pertaining to any NBFC registered with RBI, such complaints  are  forwarded  to  NBFC  Ombudsman/  Consumer  Education  and Protection Cell (CEP Cell) / Regional Office for resolution of customer grievance
- ii. In cases where the app is managed by a company not falling in the ambit of RBI, such complaints are taken up with concerned Registrar of Companies (RoC) in the State Level Coordination Committee.
- iii.  In cases where no information is available regarding the lending institution, then the complainant is asked to forward a copy of his / her loan agreement with the lending  institution  and  upon  examination  the  matter  is  shared  with  Economic Offences Wing, of respective State Governments in the State Level Coordination Committee.

(c), (d) and (e) :

Following measures have been taken by RBI to address the concerns and risks emanating from the operations of such online platforms/apps:-

- (i) A circular dated June 24, 2020 was issued to banks/NBFCs reiterating them to adhere  to  Fair  Practices  Code  and  Outsourcing  Guidelines  in  letter  and  spirit, applicable to them. The circular requires them to disclose names of digital lending platforms  engaged  as  agents  on  the  website  as  also  platforms  are  required  to disclose  upfront  the  name  of  the  lending  institution/s  on  whose  behalf  they  are interacting with customers.
- (ii) A press release was issued on December 23, 2020 cautioning the members of general public against unauthorized digital lending platforms/apps with an appeal to verify the antecedents of the service provider. The translation of the press release in vernacular languages has also been released in the local media across States.
- (iii) The matter has been taken up with the Chief Secretaries of the States requesting them to consider proactive intervention by the State law enforcement agencies as per applicable laws.
- (iv) Regional Directors of Regional Offices of the RBI are also in touch with the State Police.
- (v) A Working Group (WG) has been set up to study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players so that an appropriate regulatory approach can be put in place.

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